China's forex reserves rise for fourth month, gold holdings increase

by XIN Yuan

China's foreign-exchange reserves rose for a fourth straight month in November, helped by a softer dollar and valuation gains, data from the State Administration of Foreign Exchange (SAFE) showed on Sunday.

Reserves stood at US$3.3464 trillion, up US$3 billion from October. SAFE said the increase mainly reflected valuation gains from a weaker dollar and shifts in global asset prices, adding that China's economic fundamentals continue to underpin the stability of its reserves.

Market sentiment in November was shaped by softer US economic data and rising expectations of a Federal Reserve rate cut, which pushed the dollar lower and lifted major asset prices. WEN Bin, chief economist at China Minsheng Bank, said the weaker dollar played a central role in the month's valuation gains.

He said that signs of an improved China–US trade climate —including Washington's decision in November to reduce certain additional duties on Chinese goods —along with measures to ease foreign-investor access to China's capital markets, should help stabilize exports and reinforce confidence in the country's reserves.

SAFE said global financial assets saw mixed performance during the period as investors reassessed the macroeconomic outlook and monetary-policy paths in major economies.

Separate data from the People's Bank of China (PBOC) showed official gold reserves increased to 74.12 million ounces at end-November, up 30,000 ounces from the previous month. The central bank has now added gold for 13 straight months since resuming purchases in late 2024.

International gold prices strengthened through November, trading above US$4,200 per ounce at the start of December after touching a six-week high on Fed-cut expectations and a weaker dollar. Gains were tempered by easing geopolitical tensions.

Analysts say structural demand for gold remains firm, supported by ongoing central-bank buying and continued diversification away from US-denominated assets.