China’s Central Bank Extends Gold Buying Spree Amid Market Turmoil

China's central bank continued its relentless gold accumulation in January, marking the 15th consecutive month of purchases. The People's Bank of China added 40,000 troy ounces to its reserves, maintaining a strategy that began in November 2024. This persistent buying contrasts sharply with the broader market's volatility.

Precious metals markets experienced extreme turbulence in late January. Gold and silver initially soared to record highs before collapsing spectacularly. On January 30, gold plunged 10% in a single trading session, while silver suffered a 16% crash. Copper joined the selloff, dropping 5.7% during the same period.

Hedge funds and institutional traders rushed for exits as prices tumbled. Bullish gold positions were slashed by 23% within a week, reducing net-long contracts to 93,438 - the lowest level in three months. The dramatic pullback represents the most significant position reduction since October.

Central banks worldwide maintained their gold accumulation despite the market chaos. Official purchases reached 860 tons in 2025, continuing a multi-year trend of institutional accumulation. While this falls short of the 1,000-ton annual averages seen in recent years, it demonstrates sustained demand from monetary authorities.