A sales representative shows a piece of gold jewelry at an expo in Guangzhou, South China's Guangdong Province. File photo: VCG

China has increased its gold reserves for the past 19 consecutive months, official data showed on Sunday, reflecting the country's strategy to diversify international reserves and bolster financial security, a Chinese expert said.

Data released by the State Administration of Foreign Exchange (SAFE) revealed that China's gold reserves stood at 74.96 million troy ounces at the end of May, up by 320,000 troy ounces from a month earlier. 

Amid rising global uncertainties, the country's steadily growing gold purchases help optimize the reserves structure, while help hedge against risks from major currency swings, Zhao Qingming, a veteran financial analyst told the Global Times on Sunday.

Zhao noted that both volume and proportion of China's gold reserves in its total international reserves remain well below the global average, which means there is substantial room for further increases in the coming months. Moving forward, gold is expected to remain an important part of China's strategic reserve, Zhao said.

As a universally recognized safe-haven asset worldwide, rising gold reserves will shore up the credibility of Chinese currency, the yuan, and creates a solid foundation for its internationalization, Zhao added.

On Friday, spot gold in London dropped sharply to $4,327 per ounce, edging close to its year-end closing price of $4,325 per ounce on December 31, 2025, the Securities Times reported.

Regarding the notable pullback in global gold prices recently, Zhao said that price volatility is a normal feature of the financial market. 

"Gold has rallied for four consecutive years, and the steep gains have led to price bubbles. Hence, the current price correction is inevitable and also reasonable," Zhao said.

The SAFE revealed that China's foreign exchange reserves climbed to reach $3.4422 trillion at the end of May, surging by $31.7 billion or 0.93 percent from a month earlier. It has hit the highest level since November 2015, staying above $3.3 trillion for the past 10 months, the Securities Times reported.

The SAFE attributed the reserves growth to a firmer US dollar index and growing global asset prices, adding that China's sound economic momentum has underpinned stability of the reserves.

Caused by changes in the global macroeconomic environment and monetary policy expectations in major economies, the US dollar index edged higher in May. Due to exchange rate adjustments and asset price changes, China's foreign exchange reserves rose month-on-month. With the Chinese economy maintaining steady growth and steady progress in high-quality development, the foundation for China's stable foreign reserves remains firm, according to the SAFE.