China’s gold reserves rise:Could overtake France and Italy to reach the top three in 2026

China’s gold reserves have reached a record 2,410 tonnes, making it the world’s fifth-largest gold holder. China bought more than 103 tonnes of gold by September. If the purchases continue, it could overtake France and Italy by the end of 2026. China’s central bank bought more than 23 tonnes of gold in September. This marked its 23rd consecutive month of purchases and its largest monthly purchase since September 2023. According to The Kobeissi Letter, China is increasing its purchases by taking advantage of a decline in gold prices. The People’s Bank of China also bought more than 20 tonnes of gold each month in July and August. China ranks fifth According to an analysis by The Kobeissi Letter, the United States, Germany, Italy and France have larger gold reserves than China. China now holds 2,410 tonnes of gold. France holds 2,437 tonnes. The gap between China and France is 27 tonnes. Italy holds 2,452 tonnes of gold, putting it 42 tonnes ahead of China. If the current purchasing trend continues, China could overtake both countries by the end of 2026. China’s central bank has been steadily increasing its purchases. Its purchases in September were its largest monthly purchases since September 2023. Gold prices rise Bloomberg reported on Monday, 12 October, that falling oil prices had eased inflation concerns. This supported gold prices. The market is rising on expectations that the US Federal Reserve will signal a halt to further interest rate hikes. Investment demand has also supported gold in recent days. Gold-backed exchange-traded funds increased their holdings last week. During the same period, the People’s Bank of China also accelerated its purchases. Gold bullion was trading above $4,200 per ounce. It rose 1.3% last week. At 11:49 a.m. Singapore time, spot gold was up 0.3% at $4,206.86 per ounce. Silver rose 0.5% to $61.12 per ounce. Platinum and palladium prices also rose. The Bloomberg Dollar Spot Index fell 0.1%. Impact of Inflation and Interest Rates Christopher Wong, a strategist at Overseas-Chinese Banking Corporation, described the outlook for gold as “cautious optimism”. He said, “Inflation appears to be easing. If long-term bond yields and the US dollar continue to decline, gold prices could see a stronger recovery.” According to Bloomberg, gold prices have fallen by one-fifth since the US-Iran war began at the end of February. Disruptions to energy supplies from the Middle East have kept inflation risks elevated. This has forced some central banks to tighten monetary policy. As an asset that pays no interest, this remains a challenge for gold. The market is awaiting the inflation data due on Wednesday. Focus on Fed officials’ statements Fed Chairman Kevin Warsh will take part in a discussion at the International Monetary Fund’s annual meeting in Bangkok on Thursday. Their presence could offer clues about the thinking of the US central bank. Statements by two other senior Fed officials are also being considered significant. Fed Governor Christopher Waller and Cleveland Fed President Beth Hammack will also speak at the event.