A man places a gold bar in a locker in a vault at the precious metals dealer Pro Aurum.
Sven Hoppe/picture alliance/Getty Images
China’s central bank added 29 tons of gold to its reserves in August, marking a 10th straight increase.
The country’s stockpiling of the safe-haven asset coincides with its efforts to move away from its reliance on the dollar.
China recently cut its holdings of US Treasuries to the lowest level since 2009.
China’s central bank extended its gold-buying spree to the 10th straight month as the world’s second-largest economy seeks to move away from its reliance on dollar reserves.
The People’s Bank of China’s stockpile of the precious metal climbed by 29 tons in August to 2,165 tons, according to Bloomberg. A total of about 217 tons were added over the last 10 months, the outlet said.
China’s gold hoarding comes amid the country’s push to erode the dollar’s dominance of global trade and investment flows, as well as its status as the world’s reserve currency. The Asian nation slashed its holdings of Treasurys to a 14-year low in June.
To be sure, China isn’t the only country that’s boosting gold holdings. According to a World Gold Council report from May, 62% of central banks estimate that the yellow metal will make up a greater share of reserves in the next five years.
China and several other countries have stepped up efforts to reduce their reliance on the greenback in international trade and investments in recent years – especially with the US leveraging the dollar’s global supremacy to slap economic and financial sanctions on countries including Russia and Iran.
“The dollar’s reserve status is a privilege that gives the US significant political, economic and market influence,” GlobalData TS Lombard’s Skylar Montgomery wrote in a note last month.
“That weaponization of the dollar is part of the reason why Russia, China, and other BRICS nations have vied for an alternative to the dollar,” she added.
The success of the so-called de-dollarization movement is so far unproven – with the greenback’s share of worldwide payments hitting a record high. SWIFT payments involving the US dollar rose to an unprecedented 46% in July, per Bloomberg.
Meanwhile, BRICS nations are also exploring the option of creating a common currency to challenge the dollar.
Some market experts, however, have ridiculed dedollarization efforts – with the economist who first gave the BRICS bloc its name calling the plan “embarrassing.”