China Reports More Gold Buying, but…

…They’re Buying (Far) More Than They Admit

Bullion.Directory precious metals analysis 14 January, 2025
By Mike Maharrey
Journalist, analyst and author at Money Metals Exchange

China announced an increase in its official gold reserves in November. It was the first reported increase after a 6-month pause, and it appears it wasn’t a one-off event.

And by the way, the Chinese have a lot more gold than they admit.

The People’s Bank of China reported another increase in official gold reserves in December with a nearly 10-tonne purchase.

You’ll notice I keep emphasizing the word “official.” That’s because the Chinese are accumulating gold much faster than officially indicated, as data parsed by Money Metals investigative reporter Jan Nieuwenhuijs proved.

China was the biggest central bank gold buyer in 2023, but it stopped announcing increases to its official reserves back in May. Even with the pause in public reporting last spring, China still admitted to adding nearly 30 tons of gold to its official reserves through the first half of 2024.

As Bloomberg noted, the December increase in official gold holding happened despite a rising gold price.

“The purchase shows the PBOC is still keen to diversify its reserves even with gold at historically expensive levels. The metal’s rally to a record in 2024 was supported by monetary easing in the US, safe-haven demand, and sustained buying by global central banks.”

In fact, as Nieuwenhuijs showed, record gold prices haven’t deterred Chinese gold accumulation at all. While only admitting to adding about 45 tonnes of gold in 2024, the People’s Bank of China’s “unreported” purchases in London accounted for a stunning 110 tonnes in September and October alone.

Nieuwenhuijs wrote, “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 in early 2022.”

When the Chinese claimed it had paused new gold purchases in May, it precipitated a panicked gold selloff.

Despite the kneejerk reaction, I said at the time that it was unlikely that the Chinese were finished adding gold to their reserves.

China has a history of adding to publicly stated reserves and then going silent.

The People’s Bank of China accumulated 1,448 tons of gold between 2002 and 2019 and then reported nothing for more than two years before resuming reporting in the fall of 2022. Many speculate that the Chinese continued to add gold to its holdings off the books during those silent years as well.

Based on Nieuwenhuijs’s research, this seems almost certain.

Chinese gold accumulation is part of a broader central bank gold buying spree.

Through November, central banks bought 807 tonnes of gold in 2024 after a record third quarter.

This article was originally published here

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