China increases gold reserves while reducing US Treasury holdings

China is significantly shifting its financial reserves by increasing its gold holdings while reducing its exposure to US debt. Official data from the People’s Bank of China shows that reported gold reserves have more than doubled since 2009, rising from approximately 1,054 tonnes to about 2,366 tonnes.

Market observers suggest that actual state-held gold may be much higher, as other institutions like the State Administration of Foreign Exchange may hold undisclosed amounts. If estimates of additional reserves are accurate, China’s total holdings could reach roughly 4,700 tonnes, potentially making it the second-largest sovereign gold holder behind the United States.

Simultaneously, China has been aggressively divesting from US Treasury bonds. In July, Chinese holdings of US debt fell to $618 billion, the lowest level in 18 years. This trend coincides with growing international concerns regarding the long-term sustainability of US national debt, which has contributed to rising yields on long-term US Treasury securities.