China's Secretive Gold Hoarding Drives Up Prices: Total Purchases May Reach 250 Tons

Official Gold Purchases Reported at 25 Tons
Actual Amount Estimated to Reach Up to 250 Tons

There is an analysis suggesting that China's secretive gold hoarding is behind the recent surge in international gold prices.

On the 18th, as gold prices soar and a shortage of gold bars occurs, a photo of gold bars is displayed on the exterior wall of the Korea Gold Exchange Jongno Main Branch in Jongno-gu, Seoul. 2025.2.18. Photo by Kang Jinhyung

The Financial Times (FT), a British daily, reported on the 14th (local time) that, according to data released by the State Administration of Foreign Exchange under the People's Bank of China, China's official gold purchases this year amount to only 25 tons so far. The official reports show that China purchased about 2.2 tons in June, and 1.9 tons each in July and August, averaging around 2 tons per month.

However, according to FT, very few experts take these numbers at face value. Analysts at Societe Generale estimate that China's actual gold purchases this year could reach as much as 250 tons.

Bruce Ikemizu, Director of the Japan Bullion Market Association, said, "Especially regarding China's official figures this year, no one believes them at all," adding, "I believe China's current gold reserves are around 5,000 tons."

China's concealment of its gold purchases is seen as a strategy to quietly reduce its reliance on the US dollar. Amid ongoing tensions with the United States, China is managing risks by working to block US pressure that leverages the dollar as a tool.

The problem is that such 'hoarding' makes the outlook for gold prices even more uncertain, making it much harder to predict the direction of gold prices. In addition, China has recently been encouraging developing countries with which it has friendly relations to store their gold in China.

FT analyzed that China has recently been cooperating with developing countries such as Cambodia to settle gold transactions in yuan and to store the gold in vaults at the Shanghai Gold Exchange, aiming to expand the yuan's influence and counter the dollar's dominance in international financial markets.

This content was produced with the assistance of AI translation services.