China's Gold Holdings Increase in July Amid Modest Price Rise

China's official gold holdings increased in July, while gold prices rose modestly due to inflationary concerns and other risks outweighing a stronger dollar.

July 02, 2025 — China's central bank, the People’s Bank of China (PBoC), has increased its gold reserves for the ninth consecutive month. According to data released on July 28, the PBoC's gold holdings have risen by 60,000 troy ounces to 73.96 million troy ounces [1]. This move comes amidst a backdrop of rising gold prices and inflationary concerns, which have weighed on the dollar.

Gold prices have shown modest growth in recent weeks, driven by concerns over inflation and geopolitical risks. While the dollar has strengthened, these risks have outweighed the currency's strength, leading to increased demand for gold as a safe-haven asset. The precious metal has seen a 4.34% rise in silver prices, snapping a three-week losing streak, and has been the best-performing precious metal for the week [1].

The PBoC's gold reserve increase is part of a broader strategy to diversify its holdings away from the U.S. dollar. This move aligns with China's efforts to reduce its reliance on the dollar and increase its influence in the global financial system. The increased gold reserves also provide a hedge against potential currency devaluation and geopolitical risks.

Gold mining companies have also reported strong earnings in the second quarter of 2025. SSR Mining and OceanaGold both reported adjusted earnings per share of $0.51, beating consensus estimates and driving their stock prices up by 17.32% and 10.23%, respectively [1]. These companies have benefited from higher gold prices and improved production efficiency.

However, not all precious metals have fared well. Palladium, for instance, has seen a 6.74% decline, driven by reduced demand from China and India for gold jewelry [1]. This trend is part of a broader decline in gold jewelry consumption, with the Chinese Gold Association reporting a 3.5% year-over-year decrease in the first half of 2025 [1].

In the broader mining sector, Royal Gold has faced production challenges at its Mt. Milligan mine, revising its 2025 targets due to ongoing grade challenges [1]. Meanwhile, Orla Mining has revised its production guidance for the Camino Rojo mine after a pit wall failure, reducing its full-year 2025 production guidance to 265,000–285,000 ounces [1].

Despite these challenges, the gold sector remains resilient. The S&P/TSX Global Gold Index and the FTSE Gold Mines Index Series continue to track the performance of leading gold companies, providing investors with a benchmark for the sector [1]. As gold prices remain volatile, investors should monitor these indices and the performance of individual companies for potential investment opportunities.

References:

[1] https://www.kitco.com/opinion/2025-08-11/gold-swot-peoples-bank-china-increased-its-gold-reserves-july