Posted on 12/24/2024 2:49:41 PM PST by delta7
While 99% of the media keeps staring at official data by the Chinese central bank (PBoC)—misleadingly stating it added 5 tonnes of gold in November following a supposed six-month pause—the PBoC’s "unreported" purchases in London accounted for a stunning 60 tonnes in September and another 55 tonnes in October.
And while cross-border trade statistics from the U.K. for November have yet to be released, I foresee another purchase of a similar magnitude.
Chinese authorities see a greater role for gold in the future international monetary system, or they wouldn’t continue buying such extraordinary amounts of gold. Via London alone, the PBoC has stockpiled 1,000 tonnes of gold since Russia’s foreign exchange assets were “frozen” by the West early 2022.
London Exports to China Are a Proxy for PBoC Buying
Since July this year, I have been writing that a large share of China’s gold imports into the domestic market is not bought by the private sector. We can conclude that the bars exported from the U.K. to China are secretly destined for the PBoC.
Initially, I based my analysis on a pronounced surplus in the Chinese domestic gold market—resulting from supply (mine, recycled gold, and imports) outstripping demand. The most conceivable explanation for this surplus is that the central bank of China is behind large gold imports.
China Gold Supply and Demand Chart 1. From 2022 until November 2025 there is a surplus in the Chinese gold market, because import and domestically mined gold was more than SGE withdrawals. My findings became more evident when in September the premium on the Shanghai Gold Exchange (SGE) turned negative, but Chinese gross imports accounted for a sturdy 95 tonnes for the month.
It makes no economic sense for any bullion bank to buy gold abroad and sell at a loss at the SGE. The 60 tonnes (in 400-ounce bars) exported in September from the London Bullion Market to China went to the vaults of the PBoC in Beijing, I therefore concluded.
The PBoC Keeps Up the Pace, Buying 55 Tonnes in October
I noted the following in my last article:
…we can see that in October, the SGE was trading at a discount while imports reached 95 tonnes, which was the same as in the prior month. I strongly suspect the PBoC was secretly buying gold in London again.
Recent data by Her Majesty’s Revenue & Customs (HMRC)—Britain’s tax, payments and customs authority—reveal 55 tonnes were indeed dispatched from the London region to China in October.
Meanwhile, it’s likely the PBoC also bought gold elsewhere. Total imports into the Beijing region accounted for 69 tonnes in October, as per General Administration of Customs People's Republic of China. That’s 14 tonnes more than what was shipped from London.
An illustration I shared previously is a chart of the PBoC’s publicly disclosed gold purchases versus U.K. gold exports to China. The chart shows both are loosely correlated "although the PBoC usually takes up to a year to publicly report its acquisitions and keeps about 65% of it hidden" (quote from my article from November 26, 2025).
PBOC Official Gold Buying vs UK Exports to China Chart 3. The PBoC’s publicly disclosed gold purchases versus U.K. gold exports to China that serve as a proxy for covert buying by the Chinese central bank. Only two months after September (when the PBoC covertly resumed buying in London), it revealed to the world it bought a mere 5 tonnes in November. Even this fraction of the truth boosted sentiment in the gold market. Go figure.
The Chinese central bank is currently buying at least ten times more gold than what you read in the newspaper, and yet markets got excited based on mere breadcrumbs!
Goldman Sachs Writes on PBoC Gold Buying in London
Meanwhile, my research is gaining traction as it was picked up by Goldman Sachs (GS). Below you can see a chart by GS displaying what I first demonstrated in July, but with a different design.
At the bottom it reads "our estimate of Chinese central bank … purchases on the London OTC market is based on UK exports of large bars to China, as reported by UK customs (HMRC)." (Parroting my own conclusion.) Eventually other media will start writing about these huge purchases as well.
For me, this topic reminds me of my early work analyzing SGE withdrawals. In 2013, I began spotlighting the volumes of gold withdrawn from SGE vaults, documenting why that is a proxy for Chinese wholesale demand. By implication, gold demand in China at the time was twice what consultancy firms stated. A few years later, nobody argued about the meaning of SGE withdrawals anymore.
Gold’s Role in the International Monetary System Will Increase
In November, gold on the SGE was still trading at a discount, yet Chinese gross gold imports swelled to 122 tonnes. No doubt the PBoC struck big in the London Bullion Market once again.
Chinese Gold Market 2024 Chart 5. The Chinese central bank orders gold abroad at bullion banks and outsources transport to Beijing to those banks, making them have to register the metal at customs. My latest estimate of the PBoC’s true gold holdings is roughly 5,000 tonnes, a number that is in stark contrast to what the Chinese divulge to the IMF, i.e. 2,271 tonnes. (I will substantiate my estimate in a follow up article.)
Tellingly, it seems some large investors in the West are sniffing out the momentous developments in the gold market. Although the U.K. was a gross exporter of 55 tonnes to China in October, the U.K. itself net imported 110 tonnes.
Who bought? Most likely institutional money as ETF holdings stored in London increased by only 18 tonnes, according to statistics compiled by friend and data wrangler Nick Laird from GoldChartsRUs.com.
These are exciting times indeed for gold.
China’s monetary authority doesn’t buy gold for no reason at a pace of approximately 60 tonnes a month from Great Britain alone—now 1,000 tonnes in total since the war in Ukraine. The Chinese obviously see a greater role for gold in the international monetary system going forward.
Over the same 30-month period, the value of China’s holdings of U.S. Treasuries has declined by $250 billion.
What we’re witnessing a shift from "dollar recycling"—the status quo from 1971 through 2021—to "gold recycling." Instead of investing trade surpluses in dollars, countries are increasingly choosing for gold.
The Saudi central bank is also buying gold under the radar, next to many central banks buying openly.
As a result, less and less of the U.S. its excessive public debt (122% of GDP) is financed by foreigners, let alone foreign central banks. This forces Treasury to either reduce the fiscal deficit (currently 6% of GDP, good luck!), pay higher interest rates and accelerate the debt spiral, or print its way out of this through inflation.
In addition to dollar weaponization, the (global) debt overhang is a motive for central banks to increase their gold reserves, as historically inflation is the most common big way of restructuring debts.
I hold virtually no “dollars”. That’s dead money.
I hold companies, where people go to work each day to make me a real profit in whatever debased currency they have to deal. Companies automatically adjust their machine to generate me real profits, no matter what.
China’s global role is about to diminish bigly. Trump’s salvo at Panama isn’t about Panama, it’s about forcing China to start defending all its territorial incursions over the past decades. Let’s see if they can project their power when Trump starts kicking their asses out of our hemisphere.
They can’t and it will become very apparent to all these countries they are raping with their Belt and Road nonsense. Once they are exposed as a third rate power, other countries will start kicking them out.
China’s global role is about to diminish bigly. Trump’s salvo at Panama isn’t about Panama,….
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President Trump is projected to remain in office for four short years…..China’s “plan” projects decades ahead. Those that hold the Gold controls everything.
In any case, China is draining western Gold reserves ( Comex and LBMA). Throw in ALL the worlds Central Banks are buying historic amounts of Gold…not Bitcoin…why?
Ok. They are broke. I love these “China has a long term plan” prognosticators. The same people that said China would be the largest economy in the world by 2010, then 2015, then 2018...
They won’t last the 4 short years of Trump’s second term.
China is the oldest and brokest nation on Earth. Their economy is in ruins and they have no way of adapting under a communist regime. There isn’t enough gold on earth to stop the bleeding.
Big deal. China has a history of missing big monetary changes, starting with the switch from silver to gold - it continued to hold massive quantities of silver, and eventually became very poor and had a revolution as a result. Now they are missing the switch to Bitcoin and are piling on to gold. What happens to them if Trump decides to sell 1,000 - 2,000 tons of gold to use the proceeds to buy BTC for our national stockpile? The price of gold will crater, and China’s economy will finally go down the toilet.
They’ll need triple what they have now ,LOL
IMO, the only way gold craters (as you say) is the available supply dramatically increases, and the worlds hotspots become stable.
I’m not seeing it.
I’ll stick with silver.
Why can’t we just create gold yet?
Virtual money is erasable by a single button press.
Admittedly, I wish I had been knowledgeable about Bitoin when it was only $0.03/bit, I would have bought $10,000 right there. However, I would never have hung onto it in perpetuity. Sell it off and buy real assets.
If Trump dumps 1,000 tons, that would certainly qualify as a dramatic increase in supply. It would also be a signal that gold - which increases in supply by 1% - 2% per year, was being supplanted by BTC, which has an absolutely finite supply.
I tend to agree. However China’s demise won’t be due to Trump (although he’ll hasten it). Their impending collapse is due to insane levels of economic inefficiency and corruption, mal-investment, a demographic dead end, and an end to the “saver” mindset in the productive portion of their population. The two main themes among city dwelling Chinese are either (1) “lie flat”, meaning just give up trying to get ahead, or (2) “revenge against society”, which is causing an epidemic of randome knife and auto attacks across the country. They are doomed. Our only worry is if the CPC decides to take everyone else down with them.
Good choice...a lot of silver is used to make solar cells and in other industrial applications.
Spot on. I agree Trump can only hasten their collapse. There are many own goals on their part, like their shadow banking system. Trump will force them to defend soft targets like the Panama Canal to demonstrate they can’t project power like they think. Along with tariffs and other economic pressure.
The imbalance of young men to young women will, as you say, get worse with the worsening economy and the danger is does China look to start an external war before they get an internal one. I think they may try but it will be too late to prevent the collapse of the CCP. If they were gonna attack Taiwan they would have already. But desperate people do desperate things.
Why can’t we just create gold yet?
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It is not in “the Plan”….. notice where the two newest Gold deposits have been just discovered- China, and El Salvador- both estimated to be in trillions.Their financial rankings will change massively when they start getting it out.
With the world’s Central Banks buying historic amounts of Gold ( presumably to give their currencies some value) we will see a major shift in global financial markets and power.
Those that were “ last”, will be “ first”.
In this case it may be China is trading their falling currency for hard assets. Their total government debt is huge. Their stimulus efforts are now taking 6 units of debt to create 1 unit in growth to GDP. They are falling fast.
China’s global role is about to diminish bigly.
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Think again….of course, this will take a few years to get out….but added to their current estimated 40,000 ton reserves, they are on course to becoming a financial powerhouse.
“ Chinese scientists have uncovered a “supergiant” deposit of high-quality gold ore hidden near some of the country’s existing gold mines. The vast reserve, which could be the largest single reservoir of the valuable metal left anywhere on Earth, could end up being the largest known deposit of the precious metal anywhere in the world, and is worth more than $80 billion.…”
Let’s hope the US has the 8,000 tons they say they have….and ditch their Bitcoin nonsense.
They are falling fast.
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ALL the world’s currencies are falling…a race to the bottom. Hence the entire world’s Central Banks are buying historic, record amounts of Gold…..and cleaning out the West’s Comex and LBMA reserves.
https://www.visualcapitalist.com/visualizing-currencies-decline-against-the-u-s-dollar/
“ Central banks have been buying gold at a record pace….”
https://www.axios.com/2024/01/31/central-banks-buy-gold
….do realize they are NOT buying E money, but Gold.
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