The People’s Bank of China (PBC) is China’s central bank and much like our Federal Reserve, it carries out monetary policy. According to its website, the PBC was established in 1948 through the consolidation of Huabei Bank, the Beihai Bank, and the Xibei Farmer Bank. Back in September of 1983, China’s State Council decided to have the PBC function as China’s central bank and leading monetary authority.1http://www.pbc.gov.cn/english/130712/index.html
The People’s Bank has been aggressively buying gold since 2022 and continues to actively add to its gold reserves. As Trump’s trade and tariff war has unfolded around globe, all the world’s central banks have all been increasing their gold acquisitions while simultaneously reducing their holdings of U.S. Treasuries. China, in particular, has been adding tons of gold to its reserves — following a six-month hiatus.
China’s “Unknowable” Gold Stash
According to The Kobeissi Letter, which provides commentary on the global capital markets, central bank gold purchases are currently at historic levels with gold holdings as a percentage of global reserves reaching 18%, the highest in 26 years. Meanwhile, foreign holdings of US Treasuries have fallen to about 23% of total US government debt, the lowest in 22 years.2https://blockchain.news/flashnews/central-bank-gold-buying-hits-26-year-high-as-foreign-treasury-holdings-drop-to-22-year-low-trading-implications
The People’s Bank, in particular, has been accumulating gold at a feverish pace in 2025, and has bumped up their gold reserves by 10 tons in the first two months of this year alone. The Chinese central bank reported acquiring a staggering 50 tons of gold in February, followed by another 5 tons in March.
And while China’s “official” gold reserves are listed at 2,292 tons, no one knows with any degree of certainty, how much gold China really has. A senior market strategist at The World Gold Council admitted that China’s actual gold hoard is “unknowable”:
“A growing disparity has emerged between China’s reported holdings and the estimates of analysts. Official reserves stand at around 2,292 tons as of March 2025, according to the World Gold Council, though some speculate that the true hoard could be in excess of 30,000 tons.”3https://www.newsweek.com/why-china-buying-so-much-gold-2065652
The Chief “Ripper-Offer on Trade”
While Chinese gold buying reflects a trend among all central banks, Beijing’s latest gold grab seems to be partly fueled by Donald Trump’s attempts to address the increasing global trade imbalance. The U.S. president has made no secret of the fact that China, whom he calls the “chief ripper-offer on trade,” has cornered too much of the global marketplace.
China remains defiant, however, and believes that the U.S. is underestimating its resilience, the impact of reciprocal tariffs, and its ability to absorb the fallout from the growing trade dispute.
“Beijing, which has been repeatedly telling the world that the US was bullying countries into trade negotiations, has not backed down yet from the trade war. The propaganda online has ratcheted up, applauding Chinese innovation and diplomacy in contrast to the uncertainty unleashed by Trump. On the country’s highly controlled social media, there are plenty of posts echoing the leadership’s promise that China will keep fighting.”4https://www.bbc.com/news/articles/cwy7jdn09lxo
According to the World Gold Council, China’s gold reserves rose by 2.3% in Q1 due to:
- A weaker dollar, which pushed up USD denominated assets
- Falling US yields, which lifted bond values
- Rising gold holdings and a surging gold price, which surged 20% to US$230bn and contributed over 1% to the quarterly increase in total reserves.5https://www.gold.org/goldhub/gold-focus/2025/04/chinas-gold-market-update-investment-boom-continues-march
Ditching the Dollar
Chinese investors tend to correlate gold with wealth, security, and economic power — while the People’s Bank of China looks to gold to help insulate the Chinese economy from its dependency on the U.S. dollar.
“China is heavily reliant on the US dollar for trade with the rest of the world. As the world’s reserve currency, most commodities are priced in dollars and more than half the world’s trade is conducted using the greenback. While growing to challenge the US’s economic dominance over the past 30 years, China has built up huge foreign exchange reserves, mostly in dollars. But Beijing fears it has become too reliant on the greenback and is keen to diversify the PBC’s reserves. China has been gradually reducing its holdings, which have gradually fallen by a third since 2011 to around $800 billion, according to US data. The drop has accelerated since the COVID-19 pandemic.”6https://www.dw.com/en/whats-behind-chinas-gold-buying-spree/a-68738420
China’s embrace of de-dollarization is echoed by the BRICS bloc of nations which include Brazil, Russia, India, China, South Africa and recently added Iran, Egypt, Ethiopia, Saudi Arbia and the United Arab Emirates. According to International Banker, the expanding bloc has been clear about its desire to not only unleash new opportunities for trade but also to almost exclusively utilize local currencies in bilateral trade at the expense of the dollar.7https://internationalbanker.com/banking/whats-behind-chinas-gold-buying-spree/
The People’s Bank also stockpiles gold to protect its economy from any punitive measures that may impact international trade relations, global investment, or foreign exchange — particularly those initiated by the United States.
According to The Royal Mint:
“The reliance on the U.S. dollar has often led to vulnerabilities, as the United States has used its currency’s dominance to impose sanctions on countries like Russia and Iran. China’s strategic move to accumulate gold assets appears to be a means of insulating its financial system from such vulnerabilities, as gold holds intrinsic value and isn’t subject to the same geopolitical pressures as fiat currencies.”8https://www.royalmint.com/invest/discover/gold-news/chinas-central-banks-gold-buying-spree-what-it-might-mean-for-investors/
China’s Golden Secret
China’s gold holdings are not only “unknowable” as suggested by the World Gold Council, but prominent traders and investors have long believed that China has been purposely under-declaring their reserve numbers. The PBC’s official gold declarations often don’t add up and the lead economist at Plenum claims that over 2,700 tons of gold is unaccounted for in China — in just the last two years.9https://www.fxstreet.com/analysis/is-china-hiding-how-much-gold-it-really-has-202406211929
This is significant because gold is a powerful commodity. If China has amassed enough “secret gold” to issue a gold-backed yuan or a BRICS stablecoin backed by gold, for instance — it would almost certainly destroy the U.S. dollar and all dollar-dominated assets like stocks, bonds, mutual funds and of course cash.10https://www.brinwilson.com/the-dragons-hidden-hoard-could-chinas-secret-gold-upend-dollar-dominance-a-gold-backed-digital-yuan/
And according to Yahoo Finance, China’s gold grab is just getting started and the pace and impact of their buying frenzy is sending the world a very strong message:
“China isn’t just buying gold, it’s hoarding it. Trading volumes on the Shanghai Futures Exchange just exploded to their highest in a year, fueled by a stampede of investors, refiners, and even banks hedging against rising geopolitical heat … And it’s not just about diversification anymore, it’s about survival. Treasuries are losing their haven halo as trust in dollar-denominated assets cracks. Goldman Sachs now sees gold hitting $3,700 by year-end, possibly even touching $4,000 by mid-2026.
Vasu Menon at OCBC says it plainly: if China wants out of the dollar trap, it’ll buy more gold and fast. For global investors, the message is clear: when the world’s second-largest economy treats gold like an economic defense system, you pay attention.”11https://finance.yahoo.com/news/chinas-gold-grab-just-getting-153619975.html
This article was brought to you by ORION METAL EXCHANGE,
a top-rated GOLD DEALER with Best-in-Class CUSTOMER SERVICE.
Get a FREE Investor Kit and up to $30,000 in FREE metals (on qualifying purchases).
REPRESENTATIVES ARE AVAILABLE NOW AT: 1-800-559-0088
- http://www.pbc.gov.cn/english/130712/index.html
- https://blockchain.news/flashnews/central-bank-gold-buying-hits-26-year-high-as-foreign-treasury-holdings-drop-to-22-year-low-trading-implications
- https://www.newsweek.com/why-china-buying-so-much-gold-2065652
- https://www.bbc.com/news/articles/cwy7jdn09lxo
- https://www.gold.org/goldhub/gold-focus/2025/04/chinas-gold-market-update-investment-boom-continues-march
- https://www.dw.com/en/whats-behind-chinas-gold-buying-spree/a-68738420
- https://internationalbanker.com/banking/whats-behind-chinas-gold-buying-spree/
- https://www.royalmint.com/invest/discover/gold-news/chinas-central-banks-gold-buying-spree-what-it-might-mean-for-investors/
- https://www.fxstreet.com/analysis/is-china-hiding-how-much-gold-it-really-has-202406211929
- https://www.brinwilson.com/the-dragons-hidden-hoard-could-chinas-secret-gold-upend-dollar-dominance-a-gold-backed-digital-yuan/
- https://finance.yahoo.com/news/chinas-gold-grab-just-getting-153619975.html
