Posted on 04/03/2025 8:05:44 AM PDT by delta7
The People’s Bank of China (PBoC) continues to buy unprecedented amounts of gold as the global financial is deleveraging (i.e. investors exchange credit assets for gold).
In 2024, the Chinese central bank covertly bought 570 tonnes, encouraging gold’s ascent in global international reserves by 4%, the largest gain in four decades.
Gargantuan Gold Purchases by the Chinese Central Bank
This article is an analysis of formal and informal sources that indicate the PBoC is currently sitting on more than 5,000 tonnes of monetary gold located in Beijing – more than TWICE what has been publicly admitted.
Legacy media outlets routinely withhold crucial information from investors by principally reporting on official data on gold purchases by monetary authorities. In reality, the Chinese central bank is buying many multiples of what it’s officially disclosing, and investors should take note.
Combine large purchases by the PBoC and other regional central banks with initiatives in the East to settle trade through non-dollar ventures like mBridge and possibly gold stablecoins, and we should expect the international monetary system to continue shifting towards gold in the years ahead. Especially given today’s excessive debt levels, geopolitical tensions, and trade wars.
China Is Secretively Buying 5x More Gold Than Is Reported
Since the Ukraine war began, data show, China’s central bank has been buying roughly five times more gold than what it discloses to the International Monetary Fund (IMF).
But it’s more difficult to get an accurate estimate of how much it owned at the start of the war so we can determine how much it owns now, in total. More on that later.
Let us start off with data from the World Gold Council’s (WGC) quarterly Gold Demand Trends reports on precious metal buying by central banks in aggregate. From the WGC:
Central bank demand is calculated using information from three different sources. Monthly International Financial Statistics produced by the IMF serve as an initial check for central bank transactions… A second vital source is confidential information regarding unrecorded sales and purchases. The final element in calculated net central bank purchases is analysis of trade flow data.
These confidential sources regarding unrecorded purchases and trade flow data are important themes in our present analysis, as there is no other way to ascertain what the PBoC does behind closed doors.
By comparing the WGC’s quarterly estimates with official data from the IMF, a glaring disparity is revealed since 2022 when the war in Ukraine broke out.
According to two sources familiar with the matter, but who prefer to stay anonymous, the difference is mainly caused by “unreported purchases” by the Chinese central bank.
Chinese Panda, RANDOM Date .999 Gold, 1/10 Troy Ounce Chinese Panda, RANDOM Date .999 Gold, 1/10 Troy Ounce Price & Buy My approach has always been to take eighty percent of the difference between WGC and IMF figures and label that as secretive Chinese buying.
For instance, using this approach, I calculated that the People's Bank of China acquired 280 tonnes during the third quarter of 2022.
In December 2022, the Financial Times published a similar estimate that confirms the accuracy of my sources and methodology:
Mark Bristow, chief executive of Barrick Gold, the world’s second-largest gold miner, said China had bought tonnes of gold around the high-200s mark [in Q3 2022], based on his discussions with numerous sources.
Gold industry insiders—whether working at bullion banks, mining companies, refineries, consultancy firms, or secure logistics companies—sometimes exchange information. It’s through these interactions that estimates are conceived about the volume of secret gold buying by the Chinese central bank.
Thus, if one has access to one or multiple nodes in this network, it can piggybank on their intelligence. More on this below.
Other evidence of the PBoC’s covert gold acquisitions is the surplus in the Chinese gold market since 2022.
In the past three years, China’s import plus domestic mine supply exceeded withdrawals from the vaults of the Shanghai Gold Exchange (SGE). As the SGE is the center gold bourse in China—through laws and tax incentives most supply and demand flows through this exchange—an observed surplus must reflect acquisitions by the local monetary authority.
Another piece of evidence is the gold exported directly from the London Bullion Market to China. Because in London gold trade is conducted in large 400-ounce bars, but on the SGE, the private sector only trades in 1-kilogram bars, any gold moving directly from the U.K. to China is destined for the Chinese central bank.
The smoking gun as to Chinese government stockpiling is when we see a continuation of large exports from Britain to China whilst gold in Shanghai is trading at a discount versus London.
Obviously, no bullion bank would buy gold in London to sell at a loss in China. What actually happens is that the PBoC buys gold in London and lets bullion banks transport the metal to Beijing. In these circumstances, bullion banks (not the PBoC) must deal with customs departments and so the flow of gold is recorded.
The PBoC Secretly Holds 5,000+ Tonnes of Gold
For dessert, let’s estimate how much gold the Chinese central bank owns in total.
New Argor-Heraeus Lunar Gold Bar - 2024 Year of the Dragon, 1 Oz .9999 Gold Argor-Heraeus Lunar Gold Bar - 2024 Year of the Dragon, 1 Oz .9999 Gold Price & Buy We know how much gold it bought every quarter going back to 2010 when the WGC’s Gold Demand Trends data began. To get a ballpark estimate of how much it owns now, all we need is an estimate of how much it owned at any point in time since 2010.
I have been fortunate that on two occasions well connected industry insiders shared with me how much they thought the Chinese central bank owns. On the first occasion, in late 2015, an insider told me that from within his network, he tallied 3,300 tonnes. The second source was more conservative and conveyed in June of 2024 his estimate was approximately 4,000 tonnes at that time.
When I reverse engineer the second estimate to 2015, then take the average of the two estimates, and calculate what has been added per quarter ever since, it produces an outcome of 5,065 tonnes for the end of 2024.
So, to the best of my knowledge, 5,065 tonnes is the weight of fine gold that the Chinese central bank currently stores in the capital Beijing.
China Lifts Gold in Global International Reserves
If we take into account the PBoC’s hidden gold reserves, as well as surreptitious additions by the Central Banks of Saudi Arabia and others, world official reserves reached an all-time high of 39,547 tonnes at the end of 2024.
As virtually all new monetary gold buyers are located in the East, non-Western gold holdings are rising rapidly and have reached 45% of world gold reserves. The following chart is a perfect visual representation of the shift in global power towards the East.
My personal estimates of world official gold reserves, combined with Currency Composition of Official Foreign Exchange Reserves (COFER) data by the IMF, unveil gold’s percentage of global international reserves jumped up 4%, to 21%, in 2024. That’s the biggest surge in more than four decades……
I bet 1/2 of China’s gold is spray painted tungsten
i don’t know if the gold price is going up, but i doubt it is going down much
Objection! Calls for speculation.
I bet 1/2 of China’s gold is spray painted tungsten
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They have been draining the West’s inventory for years. During Clinton’s time, News got out about receiving gold plated tungsten from the LBMA and Comex.
There is a more likely hood Ft Knox has gold plated tungsten.
Most important implications of this apparent policy, for the rest of the world?
Hasn’t gold almost doubled since Oct 2023? IMHO it’s risky to buy after such a spike in just a year and a half.
I am not knowledgeable, but note that the source is a marketer of gold.
don’t know if the gold price is going up, but i doubt it is going down much
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If the entire world’s Central Banks have been buying historic amounts of Gold, I doubt they will allow it to tank.
When/if Gold is revalued, ( Besset says no), the revaluation will set the new “ floor”. $3000 to $5000 is what is being discussed across the industry.
“As sound as a yuan”
Hmm
What does a bunch of socialists need gold for?
What does God need with a starship? /Kirk
“Those with the Gold, make the rules.”
“A fair inference is that, since his release from prison, Armstrong has been using coins and bullion that he hid from the receiver,” they wrote in court papers in April, in which they accused Armstrong of withholding evidence from them. “This helps to explain how the coins at issue in this case came to be found by the man who sold them to the [Antoniaks]. Armstrong hid them and somehow lost control of them during the years of his incarceration — 2000 to 2011.”
https://www.latimes.com/business/la-fi-coins-martin-armstrong-20190613-story.html
If the headline were true, I’d like to sneak up on the roof and siphon enough off to retire comfortably.
I doubt an audit is going to show much of anything earth shattering. Conspiracy theorists dwell on some insane idea that Fort Knox is empty or near empty but that is really more of a movie plot than a logical assumption. Getting anything in or out of the repository is nearly impossible (it takes 14 people just to open the combination lock), everything is guarded 24/7, cameras and sensors everywhere etc. In addition this whole line of no audit being performed since the 1950’s is total BS. A complete inventory of the repository holdings was done around 2012 and included a breakdown of the purity of each gold bar in the repository.
“ Central banks have been loading up on gold since 2020, and for many, the buying sprees are a result of governments’ economic stimulus plans during the pandemic, which caused record-breaking inflation in subsequent years…. Central banks bought a record 1,082 metric tons of gold in 2022. Those institutions also accumulated 1,037 metric tons of gold in 2023. And in 2024, central banks are currently on track to break the record set in 2022.
Central banks accumulated 299.94 metric tons of gold in the first quarter of 2024, setting a record for Q1 gold purchases. An additional 183.39 metric tons of gold arrived in the second quarter, representing the highest Q2 total since 2021.
In the third quarter of 2024, central banks bought 186.2 metric tons of gold, which represents a steep year-over-year decline from Q3 2023 gold purchases. However, the physical asset’s demand has more than doubled year-over-year, according to the World Gold Council…..”
https://money.com/central-banks-gold-buying-spree/
…..keep in mind 2,000 tons plus has been shipped INTO the US in February alone, a total of 4,000 tons Jan to date. One must ask Why?
What does a bunch of socialists need gold for?
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To back their currency. The entire world’s currencies are crashing in purchasing power. It’s a Global thing.
“One must ask Why?”
You have pasted that same post several times over the past few months.
I gave you the answer.
One must ask why you keep posting that question.
complete inventory of the repository holdings was done around 2012 and included a breakdown of the purity of each gold bar in the repository.
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False. The last full assay audit was done in the early 1950’s. A full audit requires assay, matching serial numbers, and a comprehensive check to see how much our Treasury has leased out.
What are they using to buy the Gold ? LOL
Excerpt “STATEMENT OF THE HONORABLE ERIC M. THORSON INSPECTOR GENERAL
DEPARTMENT OF THE TREASURY
BEFORE THE HOUSE COMMITTEE ON FINANCIAL SERVICES SUBCOMMITTEE ON DOMESTIC MONETARY POLICY AND TECHNOLOGY JUNE 23, 2011
2:00 PM
Chairman Paul, Ranking Member Clay, and Members of the Subcommittee, thank you for the opportunity to appear before you this afternoon for the hearing entitled “Investigating the Gold: H.R. 1495, the Gold Reserve Transparency Act of 2011 and the Oversight of United States Gold Holdings.”
My testimony will cover the audits that my office has and is conducting on the United States Mint’s Schedule of Custodial Deep Storage Gold Reserves.
Before I discuss the details of the audits that are the topic of this hearing, I would like to make one point very clear – 100 percent of the U.S. Government’s deep storage gold reserves in the custody of the Mint has been inventoried and audited. Furthermore, these audits have not found any noteworthy exceptions. I also want to make it clear that the physical security over the gold reserves is absolute. I can say that without hesitation because I have personally observed the gold myself. Accordingly, H.R. 1495, which calls for a full assay, inventory, and audit of gold reserves of the United States together with an analysis of the sufficiency of the measures taken for the security of such reserves, is redundant of audit work already done.” Read the full report here….
https://oig.treasury.gov/system/files/2021-01/OIG-CA-11-007.pdf
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