Is China Quietly Amassing Gold?

China has been purchasing gold at a rate ten times higher than officially disclosed, buying 55 tons in October compared to reported purchases of 5 tons, according to a recent Goldman Sachs analysis.

The bank’s data from London’s over-the-counter (OTC) market revealed significant discrepancies between China’s official reports and actual purchases, suggesting a strategy to conceal its diversification away from dollar assets, Goldman Sachs analysts wrote in their report.

“Surveys and history suggest that central banks in emerging markets buy gold to hedge against financial and geopolitical shocks,” Goldman analysts wrote, noting that concerns about such shocks have “structurally increased since the freezing of Russian reserves in 2022.”

The covert activity helped drive total central bank gold purchases to 64 tons in October, compared to a pre-2022 average of 17 tons, according to the bank’s projections. The surge in purchases comes as emerging market central banks reassess reserve risks following Western sanctions on Russia.

Goldman Sachs analyst Lina Thomas projects gold prices will reach $3,000 per ounce by end-2025, citing continued central bank demand. The bank noted that even with just one more Federal Reserve rate cut, gold prices could still reach $2,890 per ounce.

A World Gold Council survey of 69 central banks conducted from February to April 2024 found 81% expect global central bank gold holdings to rise in the next 12 months, with none forecasting declines. The survey showed 29% of respondents plan to increase their own gold holdings, the highest proportion since the survey began in 2018.

Also read: Central Bank Gold-Buying In 2022 Was at A 55-Year High, WGC Says


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

First Majestic Posts Record Cash Flows In Q1 As Production Costs Fall

Brazil Potash Secures Funding In Support Of US$2.5 Billion Autozales Project

Related News

Retail Traders Dive Into Chinese ETFs Even as Institutional Investors Flee

Retail investors have been flocking to ETFs that track Chinese companies, after a stringent regulatory...

Saturday, August 7, 2021, 11:09:00 AM

Unseen Threat: China’s Commodities Stockpile Could Shake the World

Over the past two decades, China has consumed vast amounts of raw materials to support...

Thursday, July 25, 2024, 09:20:13 AM

Newlox Gold Begins Construction Of Second Gold Processing Plant

Newlox Gold Ventures Corp (CSE: LUX) has begun construction at its second precious metals processing...

Thursday, March 25, 2021, 08:22:31 AM

West Red Lake Gold Releases 2021 Exploration Plan

West Red Lake Gold Mines (CSE: RLG) this morning released its exploration plans for its...

Thursday, January 28, 2021, 08:06:58 AM

China’s Economic Stimulus Sends Ripples Through Global Markets

China’s central bank has announced a series of major financial measures to boost the economy,...

Friday, September 27, 2024, 12:09:16 PM