China's gold purchasing is gaining momentum. Looking at the latest announcement from the People's Bank of China, gold reserves had accumulated to 74.38 million ounces as of the end of March, continuing a 17-month consecutive increase. Of particular note is the movement in March alone. Previously, the monthly pace was about 1 to 2 tons, but last month saw a significant acceleration to 160k ounces (about 5 tons).

Examining China's buying pattern so far, after resuming substantial purchases in November last year, the pace was aggressive at around 10 tons per month from November to December. Since then, it temporarily stabilized at around 1 to 2 tons, but now it has entered another acceleration phase. What does this change signify? Essentially, the central bank has not stopped buying gold and is flexibly adjusting its pace according to market conditions. There is a clear strategy of increasing purchases during periods of lower prices.

In fact, gold prices fell sharply in March. Due to tensions between the US and Iran, the gold market experienced liquidity pressures, leading to a 12% plunge in a single month—the largest drop since 2008. What happened during this phase? Some central banks in emerging countries sold gold. The Central Bank of Turkey sold or swapped about 60 tons of gold over two weeks after the escalation of tensions, responding to exchange rate stabilization and capital needs. However, this was tactical selling, not a strategic shift in policy.

On the other hand, when speculative capital flows in and then suddenly retreat, risk assets come under pressure, forcing investors to sell gold to replenish liquidity. Amid such pressures, some countries, including China, have instead increased their holdings, viewing it as an opportunity. Countries like the Czech Republic and Uzbekistan have also increased their gold holdings, maintaining their stance as net buyers.

Another important perspective is that the official data on central bank gold purchases only accounts for about one-third of the total. When comparing UK customs' net export data and changes in the London vaults, it appears that roughly two-thirds of the actual gold purchases by central banks worldwide are not publicly disclosed. In other words, the amount of gold accumulated behind the scenes is likely much higher than the visible figures suggest.

Even with short-term fluctuations caused by US-Iran tensions, the long-term gold-buying stance of central banks, led by China, remains unchanged. In fact, during price correction phases, they function as counter-cyclical buyers. This structure is seen as a key factor supporting the long-term bullish case for gold.