USD/CNY faces pressure as China's gold reserves surge for 14th month

China's gold reserves reached 74.15 million troy ounces in December, marking the 14th consecutive monthly increase and valued at $319.45 billion, up from $310.65 billion in November. This persistent accumulation, which began in November 2024, reflects China's strategic diversification away from USD-denominated assets, potentially weighing on USD/CNY. The People's Bank of China's gold buying spree has been instrumental in supporting global gold prices while simultaneously reducing reliance on US dollar reserves. This trend suggests continued yuan strength against the dollar as Beijing signals confidence in alternative reserve assets. Technical indicators show USD/CNY testing support at 7.2500, with further downside possible if China maintains its gold accumulation pace. The move aligns with broader de-dollarization efforts among major economies, potentially limiting dollar strength in Asian trading sessions.