Published: · Region: East Asia · Category: markets

China’s Gold Buying Surge and Stronger Yuan Signal Push Against Dollar Pressure

China sharply increased its gold purchases in July and fixed the yuan at its strongest level since early 2023, reinforcing a quiet campaign to shore up confidence and hedge against dollar risk. The moves matter for central banks, commodity exporters, and investors trying to read how Beijing plans to defend its currency and diversify reserves in a more fractured financial system.

Beijing is leaning on two of its most potent financial tools at once: its central bank and its deep pockets of gold. In July, China’s central bank accelerated purchases of the metal, adding roughly 20 tonnes in its largest monthly increase since October 2023, while also setting the yuan’s daily midpoint at its strongest level since February 2023. Taken together, the steps point to a leadership worried about currency confidence and long-term exposure to the U.S. dollar, and willing to deploy both market and symbolic instruments to manage those risks. The 20‑tonne addition in July represents a decisive ramp-up from slower buying earlier this year and adds to a multi-year…

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