China's central bank increased its gold reserves in April, extending the buying streak to 18 consecutive months, even as market expectations of gold prices began to diverge after sharp rises over the past five years.

Data released by the People's Bank of China on Thursday showed that the PBOC added 260,000 ounces to China's gold reserves last month — marking the largest monthly addition since December 2024, according to market tracker Wind Info — taking the country's official gold holdings to 74.64 million ounces at the end of April, up from 74.38 million ounces at the end of March.

"China's central bank acts more like a long-term allocator than a short-term trader," Shao Yu, chief economist at the innovation center of Fudan University's School of Management, said, adding that its gold purchases reflect both strategic positioning to buffer against risks and efforts to optimize costs over time.

Shao said that the PBOC is likely to continue its "small but steady" approach to increasing gold holdings, adjusting the pace flexibly — slowing purchases when prices rise significantly, while stepping up buying during sharp declines.

China's sustained gold buying, Shao added, is helping stabilize the global gold market by limiting downside risks through steady demand.

Meanwhile, China's foreign exchange reserves rebounded above $3.4 trillion in April amid a weaker US dollar and a diverged performance of global financial assets, the State Administration of Foreign Exchange said.

The country's forex reserves stood at $3.4105 trillion at the end of April, up $68.4 billion, or 2.05 percent, from the end of March.

SAFE added that China's economy has maintained a stable and improving momentum with strengthened development resilience and vitality, laying a solid foundation for keeping forex reserves broadly stable.