China Buys the Dip as Gold Prices Drop Over 6% in September

China is taking advantage of cheaper gold prices (CM:XAUUSD). As the price of the precious metal fell in September, the country stepped in to buy a large amount. This move shows that China wants to keep growing its national savings in physical gold, even when market prices go down.

China Is Buying a Record Amount of Gold in September

The People's Bank of China bought 740,000 ounces of gold in September. This equals about 23 tonnes of the metal. It stands as the largest single monthly purchase for the country since October 2023. With this new addition, China now holds 77.47 million ounces in total, up from 76.73 million in August.

This marks 23 months in a row that China has added to its gold supply. The buying pace has picked up speed as the year goes on. In total, China has bought roughly 103 tonnes of gold since the start of 2026. Only Poland has purchased more gold so far this year.

Falling Gold Prices Have Shrink China's Total Reserve Value

Even though China holds more physical gold now, the total cash value of its stash went down. Gold prices fell 6.57% during September. The metal started the month near $4,449 and ended at $4,157.14. This September close leaves gold quite a bit lower than its high point in February, when it traded near $5,278.

Because the price per ounce dropped, the total value of China's gold reserves fell to $323.5 billion from $350.1 billion the month before. The wider pool of foreign exchange cash in China also dropped to $3.4 trillion. Still, purchasing the metal while the cost is lower allows the country to build up its safety net for the future at a better price.

Global Markets Have Pushed Gold Prices even Lower Today

The downward trend for gold has continued into October. As of October 7, the price of gold slipped below $4,150 an ounce and has touched lows near $4,077. This drop comes as the United States dollar gains strength. A stronger dollar makes gold more expensive for buyers using other currencies. This extra cost hurts overall demand for the metal.