Trust Economics, based on trade data, estimates that China could buy up to 250 tons of gold in 2025, an amount equivalent to more than a third of global central bank demand. China’s gold rush is fueling a record price rally as a growing number of shadow transactions create a murky picture for gold traders.
China’s total purchases could exceed 250 tons this year, Trust Economics estimates. China’s undeclared gold purchases could be more than ten times higher than officially reported as the country tries to discreetly reduce its exposure to the dollar, an effort also being made by Russia. This highlights the increasingly opaque demand profile behind gold’s record rally. Official announcements of monthly purchases are so low – 1.9 tons in August, 1.9 in July and 2.2 in June – that few in the market consider them reliable.
As mentioned above, Trust Economics, based on trade data, estimates that China could buy and exceed a size of the order of 250 tons of gold by 2025, an amount corresponding to more than a third of global central bank demand. The size of these undeclared purchases highlights the increasing difficulties for traders to predict the course of prices in a market now dominated by central banks.
The routes of gold
Traders are turning to alternative data to track demand, such as orders for new 400-ounce bars with consecutive serial numbers – usually cast in Switzerland or South Africa, transported via London and then flown to China. China’s actual gold reserves may be closer to 5,000 tons, about double the official figure.
The rise in global reserves
Central banks around the world have been buying large amounts of gold in recent years, driving the price above $4,300 an ounce – a record high. Data from the World Gold Council shows that over the past decade, the share of gold in global reserves outside the US has risen from 10% to 26%.
Fewer and fewer of these purchases are being reported to the IMF, which collects the data on a voluntary basis. In the last quarter, only a third of official purchases were reported, compared with 90% four years ago. Some countries are avoiding announcements to avoid affecting the market, others for political reasons – including fears that buying gold as a hedge against the dollar could cause tension with the Trump administration.
Moreover, China is the world’s largest producer and consumer of gold, allowing it to build up its reserves through domestic production. The country also offers developing economies the opportunity to store their gold in Chinese vaults – as Cambodia recently did.
Despite the abundance of data and estimates, the true size of China’s markets remains largely unknown.
Russia’s gold reserves rise by more than $92 billion
Meanwhile, Russia’s gold reserves have surged by a record $92 billion in the past 12 months, driven by a sharp rise in international gold prices, Russian media reported on Thursday, November 13. According to data from the Central Bank of Russia, Russia held $299.8 billion worth of gold as of November 1, up from $207.7 billion a year earlier.
The surge is largely due to the gold market rally, which has seen prices rise about 1.5 times in a year — from about $2,700 to $4,000 per ounce. Despite the rise in value, the physical volume of Russian reserves fell slightly, by about 100,000 ounces (about 3.1 tons), reaching a total of 74.9 million ounces (2,329.7 tons) on October 1. Gold now accounts for 41.3% of Russia’s international reserves. In contrast, the foreign currency portion increased by just 0.5%, reaching $426 billion.
The precious metal becomes a geopolitical weapon
The increase in gold reserves strengthens confidence in the national currency and reduces the vulnerability of the economy. Gold is a key defensive asset against sanctions and geopolitical uncertainty.
The existence of large gold reserves reduces the economy’s sensitivity to currency fluctuations, allows for more confident management of the balance of payments and the exchange rate, and gives the Central Bank a tool for stabilizing the financial market in the event of external shocks.
The acceleration of the increase in reserves is mainly due to the rise in international gold prices. Since November 2024, the price has increased by almost 65%, reaching a peak of $ 4,356 per ounce, which significantly strengthened the value of Russian reserves.
At the same time, the physical volume of gold decreased by about 3.1 tons in a year.
The dedollarization policy also played a key role, as the Central Bank of Russia reallocated resources in favor of gold and the yuan.
The advantages and risks
Trust Economics reports that increasing the share of gold in reserves has both advantages and risks.
Gold cannot be pledged, strengthens the country’s creditworthiness and remains a liquid asset in times of crisis.
However, it does not provide a stable income and its value can decline if international prices decline, which affects the overall level of foreign exchange and gold reserves.
In addition, the storage of the metal entails costs, while an excessively large share of gold can limit the Central Bank’s flexibility in managing liquidity.
It is also likely that gold will maintain its role as a priority in the changing international financial system – especially if cooperation within the framework of the BRICS and other alternative international organizations continues to deepen.
At the same time, the pace of accumulation will depend on the course of gold prices and the need to diversify reserves.
Recently, it was announced — according to the Central Bank of Russia — that the country’s gold reserves had increased in value by $92 billion in one year. This development is attributed to the rally in the gold market, where prices increased by 150%, reaching $4,000.
In general, Russia and China are implementing the plan to overthrow the hegemony of the dollar using an ancient asset – this activates significant transformative potential for the global economy.
