China Boosts Gold to $375B as U.S.–Iran Tensions Escalate

China raises gold reserves to $375B after cutting US Treasuries as US–Iran tensions fuel oil and market volatility.

China has increased its gold reserves to about $375 billion as the U.S.–Iran tensions intensify.

The move comes amid reports of military exchanges in the Middle East and rising market volatility.

Officials and analysts say the reserve shift reflects a broader change in China’s foreign asset strategy.

China Expands Gold Reserves to Record Levels

China’s official gold reserves reached about 74.19 million fine troy ounces by January 2026.

The holdings were valued near $375 billion based on prevailing prices. Data from the People’s Bank of China showed a 15-month buying streak.

The increase follows a steady reduction in U.S. Treasury holdings during 2025.

Public data indicates China cut its exposure by roughly $115 billion over eleven months. The shift reduced its reliance on dollar-denominated debt.

Central bank filings show consistent monthly additions to bullion reserves.

Analysts at state-linked institutions said gold supports reserve stability during external shocks. The central bank has not issued detailed public comments on the recent purchases.

US Iran Tensions Add to Market Volatility

Tensions between the United States and Iran intensified in late February 2026. Regional media reported joint U.S. and Israeli strikes on Iranian targets.

Iranian authorities responded with missile and drone launches, according to defense officials. Oil markets reacted quickly to the reports. 

Brent crude prices moved higher as traders assessed risks to supply routes. The Strait of Hormuz remains a key transit point for global energy shipments.

Shipping insurance premiums also increased during the period. Currency markets showed weakness in several emerging economies. 

Investors monitored diplomatic channels after nuclear talks in Geneva stalled. Gold prices climbed during the escalation.

Spot prices rose above $5,200 per ounce in volatile trading, according to commodity market data. Some analysts projected further gains if hostilities continue.

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Shift Away From US Debt and Toward Bullion

China’s gold buying coincides with a broader trend among several BRICS members.

Public reserve data shows some countries trimming U.S. debt holdings. Central banks in these economies reported higher bullion allocations.

Economists state that gold carries no counterparty risk and can serve as a settlement asset. It is also viewed as protection during sanctions or payment disruptions. 

These features gain attention during periods of geopolitical strain. Domestic demand in China also increased.

Gold exchange-traded funds recorded strong inflows in January. Assets under management reached about RMB 333 billion, or $36 billion, based on exchange disclosures.

Market participants are watching bond yields and inflation data. Higher oil prices can feed into transport and production costs. That pattern may affect rate decisions by major central banks.

Equity markets showed mixed performance as investors adjusted risk exposure. Treasury yields fluctuated alongside commodity prices.

Traders cited uncertainty around energy supply and diplomatic developments. China has not announced any change in its official currency policy.

However, reserve diversification remains part of its long-term planning. Analysts expect central banks to continue monitoring geopolitical events and commodity markets in the coming months.

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