On March 7, the latest data from the State Administration of Foreign Exchange (SAFE) showed that as of the end of February 2026, China's foreign exchange reserves had exceeded the $3.4 trillion mark, while the central bank had increased its gold holdings for 16 consecutive months.

   Foreign exchange reserves reach $3.4 trillion   

       Data showed that as of the end of February 2026, China's foreign exchange reserves stood at $3,427.8 billion, an increase of $28.7 billion from the end of January, representing a rise of 0.85%.

       SAFE stated that in February 2026, influenced by factors such as macroeconomic data and monetary policies of major economies and their expectations, the U.S. dollar index rose, while prices of major global financial assets showed mixed movements. The combined effects of currency translation and asset price changes led to an increase in the scale of foreign exchange reserves for the month. China's economy is progressing steadily with improvements and advancements towards higher quality and better structures. The supporting conditions and fundamental trend for long-term positive growth remain unchanged, which is conducive to maintaining the basic stability of the foreign exchange reserve scale.

       Wen Bin, Chief Economist at China Minsheng Bank, stated that the 2026 Government Work Report emphasized the need to "further expand high-standard opening up," releasing the determination and confidence to promote reform through opening up. With strong support from national strategies, exports will continue to play a fundamental role in stabilizing cross-border capital flows. Advantages such as diversified trading partners, optimized and upgraded export structures, and the rapid development of new trade formats are prominent, helping to maintain exports at a relatively high level.

       Regarding cross-border capital flows, Wen Bin believes that as China's capital markets stabilize and pick up, and the reform of the promotion system for foreign investment deepens, the willingness of overseas investors to hold RMB assets for the long term continues to increase. Securities investment maintains a reasonable scale of net inflows, and foreign direct investment remains stable. China's economy will continue to achieve effective qualitative improvement and reasonable quantitative growth, laying a solid foundation for the basic stability of the foreign exchange reserve scale.

     "Measured by different standards, China's current foreign exchange reserve scale, slightly above $3 trillion, is in a moderately ample state. Considering various factors, the scale of foreign reserves is expected to remain basically stable in the future," said Wang Qing, Chief Macro Analyst at Golden Credit Rating.

   Central bank increases gold holdings for 16 consecutive months   

       Data showed that gold reserves stood at 74.22 million ounces at the end of February, a month-on-month increase of 30,000 ounces. This marked the 16th consecutive month that the central bank had increased its gold holdings since resuming purchases in November 2024.

       Wang Qing believes that the central bank's continued modest increases in gold holdings signal an optimization of the international reserve mix. Currently, with new changes in the global political and economic landscape, international gold prices are likely to trend upward more easily than downward for a considerable period. This also implies an increased necessity to increase gold holdings from the perspective of optimizing the international reserve structure.

       Since the beginning of 2026, gold prices have experienced volatility due to multiple factors. London gold and COMEX gold rose by 7.92% and 8.16% respectively in February, but fell by 2.09% and 2.17% respectively in the first week of March.

       Shenyin & Wanguo Futures believes that although heightened global uncertainty in the short term supports periodic strength in the U.S. dollar index, market concerns about the sustainability of U.S. fiscal policy are intensifying. Coupled with the reconstruction of the global political and economic order, the diversification of reserve assets by global central banks, and the ongoing de-dollarization process, the long-term upward trend for gold remains unchanged, supported by multiple factors including geopolitical risks, inflation hedging demand, de-dollarization, and central bank purchases.

       Fengneng Futures stated that while the US-Iran conflict pushes up market risk aversion, factors such as a stronger U.S. dollar index, cooling expectations for interest rate cuts, and capital shifting from the metals sector to the energy and chemicals sector suggest short-term fluctuations for gold prices. However, looking at the medium to long term, the foundation for a gold bull market remains relatively strong.