{"id":3170,"date":"2025-11-20T18:58:11","date_gmt":"2025-11-20T18:58:11","guid":{"rendered":"https:\/\/trusteconomics.eu\/?p=3170"},"modified":"2025-11-20T18:58:11","modified_gmt":"2025-11-20T18:58:11","slug":"chinas-secret-gold-purchases-are-driving-up-the-price-of-gold","status":"publish","type":"post","link":"https:\/\/trusteconomics.eu\/index.php\/2025\/11\/20\/chinas-secret-gold-purchases-are-driving-up-the-price-of-gold\/","title":{"rendered":"China’s secret Gold purchases are driving up the price of Gold"},"content":{"rendered":"\r\n\r\nTrust 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\u2019s gold rush is fueling a record price rally as a growing number of shadow transactions create a murky picture for gold traders.\r\n\r\n \r\n\r\nChina\u2019s total purchases could exceed 250 tons this year, Trust Economics estimates. China\u2019s 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\u2019s record rally. Official announcements of monthly purchases are so low \u2013 1.9 tons in August, 1.9 in July and 2.2 in June \u2013 that few in the market consider them reliable.\r\n\r\n
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\"\"<\/figure>\r\n<\/div> \r\n\r\n \r\n\r\n \r\n\r\nAs 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.\r\n\r\n \r\n\r\nThe routes of gold<\/strong>\r\n\r\n \r\n\r\nTraders are turning to alternative data to track demand, such as orders for new 400-ounce bars with consecutive serial numbers \u2013 usually cast in Switzerland or South Africa, transported via London and then flown to China. China\u2019s actual gold reserves may be closer to 5,000 tons, about double the official figure.\r\n\r\n \r\n\r\nThe rise in global reserves<\/strong>\r\n\r\n \r\n\r\nCentral banks around the world have been buying large amounts of gold in recent years, driving the price above $4,300 an ounce \u2013 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%.\r\n\r\n \r\n\r\nFewer 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 \u2013 including fears that buying gold as a hedge against the dollar could cause tension with the Trump administration.\r\n\r\n \r\n\r\nMoreover, China is the world\u2019s 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 \u2013 as Cambodia recently did.\r\n\r\n \r\n\r\nDespite the abundance of data and estimates, the true size of China\u2019s markets remains largely unknown.\r\n\r\n \r\n\r\nRussia\u2019s gold reserves rise by more than $92 billion<\/strong>\r\n\r\n \r\n\r\nMeanwhile, Russia\u2019s 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.\r\n\r\n \r\n\r\nThe surge is largely due to the gold market rally, which has seen prices rise about 1.5 times in a year \u2014 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\u2019s international reserves. In contrast, the foreign currency portion increased by just 0.5%, reaching $426 billion.\r\n\r\n \r\n\r\nThe precious metal becomes a geopolitical weapon<\/strong>\r\n\r\n \r\n\r\nThe 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.\r\n\r\n \r\n\r\nThe 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.\r\n\r\n
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\"\"<\/figure>\r\n<\/div> \r\n\r\n \r\n\r\n \r\n\r\nThe 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.\r\n\r\n \r\n\r\nAt the same time, the physical volume of gold decreased by about 3.1 tons in a year.\r\n\r\n \r\n\r\nThe dedollarization policy also played a key role, as the Central Bank of Russia reallocated resources in favor of gold and the yuan.\r\n\r\n
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\"\"<\/figure>\r\n<\/div>
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\"\"<\/figure>\r\n<\/div> \r\n\r\n \r\n\r\n \r\n\r\nThe advantages and risks<\/strong>\r\n\r\n \r\n\r\nTrust Economics reports that increasing the share of gold in reserves has both advantages and risks.\r\n\r\n \r\n\r\nGold cannot be pledged, strengthens the country’s creditworthiness and remains a liquid asset in times of crisis.\r\n\r\n \r\n\r\nHowever, 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.\r\n\r\n \r\n\r\nIn 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.\r\n\r\n \r\n\r\nIt is also likely that gold will maintain its role as a priority in the changing international financial system \u2013 especially if cooperation within the framework of the BRICS and other alternative international organizations continues to deepen.\r\n\r\n \r\n\r\nAt the same time, the pace of accumulation will depend on the course of gold prices and the need to diversify reserves.\r\n\r\n \r\n\r\nRecently, it was announced \u2014 according to the Central Bank of Russia \u2014 that the country\u2019s 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.\r\n\r\n \r\n\r\nIn 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.\r\n\r\n","protected":false},"excerpt":{"rendered":"

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\u2019s gold rush is fueling a record price rally as a growing number of shadow transactions create a murky picture for gold traders. … <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[200,59],"tags":[52,83,620,82,572,540],"class_list":["post-3170","post","type-post","status-publish","format-standard","hentry","category-developing-economies","category-proposed-fiscal-policies","tag-china","tag-dollar","tag-foreign-exchange-reserves","tag-gold","tag-russia","tag-trust-economics"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/3170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/comments?post=3170"}],"version-history":[{"count":1,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/3170\/revisions"}],"predecessor-version":[{"id":3171,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/3170\/revisions\/3171"}],"wp:attachment":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/media?parent=3170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/categories?post=3170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/tags?post=3170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}