Recently, a credible analysis published by Money Metals confirmed what has long been speculated: China is a significant secret buyer of gold.
This revelation aligns with reports previously shared in this space, including a September 30th post highlighting similar findings. Goldman Sachs had already pointed to such activity, and now further legwork by Money Metals’ own analyst confirms it.
In a post written for Money Metals titled: Chinese Central Bank Just Secretly Bought 60 Tonnes of Gold Jan Nieuwenhuijssubstantiates these claims.
The People’s Bank of China (PBoC) is covertly buying very large amounts of gold, adding upward pressure to a tense gold market.
According to Chinese customs, gross gold import into the Beijing region for September accounted for 69 tonnes, which is roughly in line with the U.K.’s gross export to China of 60 tonnes. Source: MoneyMetals
The report reveals that China’s central bank, the People's Bank of China (PBOC), covertly purchased approximately 60 tons of gold in September alone (This has been going on since May of 2024) with evidence of tonnage being offloaded from London as far back as May of this year
While the PBoC reported no additional purchases after April, Goldman’s NowCast data estimates 50 tonnes of institutional purchases from China on the London OTC market in May.
The September figure noted by Money Metals aligns with customs data indicating large shipments of gold from London to Beijing with a 9 ton shortfall explained by Swiss exports.
Here is Goldman’s explanation of how the Swiss mechanism operates:
Switzerland Excludes Central Bank Gold Flows from Customs Data, Unlike the UK; the Post-2022 Discrepancy Suggesting that Higher London Purchases of Central Bank Gold on their way to China Are Likely in Transit/Stored in Switzerland.
While these mechanisms (Off-balance sheet holdings with PBOC and OTC trades to keep price disruption to a minimum) have been known strategies for years, the frequency and scale of such purchases have increased significantly.
James Rickards has discussed this in the past. Here he is in an interview on topic:
There’s a very good reason to believe, based on Chinese mining output figures, Chinese gold imports, activities of People’s Liberation Army, which moves [and controls some] the gold. I’ve been to China recently. I met with the top gold banks in China. I’ve also been to Switzerland recently and met with refiners there who actually sell gold to the Chinese- Source
The BRICS nations, akin to individual gold stackers, are strategically accumulating gold as part of their broader economic initiatives whiel taking care to not raise concerns about supply. Using the terminology of the Oil movie “There Will be Blood”; China and its BRICS partners are drinking the West’s golden milkshake with a straw that goes from Beijing to London.
Goldman Sachs has also emphasized that physical gold buying, rather than dollar correlations, is increasingly driving price movements. Hence this clandestine buying has driven prices much more than traditional correlations have since the Ukraine war started and the US confiscated Russia’s USD wealth.
The Bank’s analysis highlights a “reset” in global gold market dynamics—a notable term in light of geopolitical shifts. Accordingly, we’ve unlocked our breakdown of Goldman’s analysis providing readers with a comprehensive view of how such buying impacts the market.
Gold hoarding as is known from history, is part and parcel of a mercantilistic world. Here are other beahviors that intersect with this mindset from both a Gold and trade point of view.
Russia and China’s Actions
The second focal point is a recurring theme in today’s geopolitical landscape: mercantilism. This economic philosophy, rooted in maximizing exports and minimizing imports, has re-emerged in various forms across the globe. Recent developments underscore its relevance, from Russia’s restrictions on scrap metal exports to China’s tightened commerce policies.
Russia: Scrap metal exports are now restricted, ensuring the material is retained for domestic refinement and use. Additionally, Russia is limiting gold exports, a clear sign of resource protectionism.
MOSCOW. Nov 25 (Interfax) - The Russian government has introduced a temporary ban on the export of waste and scrap of precious metals from December 1, 2024 to May 31, 2025, this decision will enable increasing the load of Russian refinery operators, the Russian government said on its website on Saturday.Source
China: The country has imposed restrictions on exporting raw materials like lithium unless they are converted into value-added products such as batteries. Similarly, it has loosened regulations to encourage domestic gold buying, even permitting smaller bar sizes for retail investors.
As U.S.-China competition intensifies, it’s a real possibility that China could implement further controls—even bans—on mineral exports to the United States. Source
These policies exemplify how nations are pivoting toward controlling their resources and supply chains to bolster local industries. For example, China’s approach mirrors a long-term strategy of fostering value-added exports while ensuring raw materials serve its domestic economy.
The Wheel of Mercantilism
To conceptualize modern mercantilism, imagine a wheel of interconnected strategies, each reflecting protective or self-serving economic policies:
Low or No Taxes on Raw Material Imports: Nations import cheap resources, often underpricing labor and materials from less developed countries.
High Taxes on Finished Product Imports: Tariffs ensure that domestic industries are shielded from foreign competition—a tactic mirrored in past U.S. trade policies.
Restricted Export of Precious Metals: Countries like Russia and China are tightening controls to retain gold and other critical resources.
Value-Added Export Prioritization: Selling refined goods instead of raw materials ensures higher economic returns, a cornerstone of China’s policy.
Government Support for Home Industries: Subsidies or incentives for local manufacturing to gain a competitive edge globally.
Even shipping is impacted. The growing reliance on domestic fleets for trade, coupled with the strategic construction of ports, as seen with China’s efforts in Peru, further underscores the global pivot toward self-reliance.
Today's Mercantilism responds to shrinking globalism. It once helped transition from Feudalism to Globalism and now acts as a buffer against potential global conflicts and neo-feudalism.4
Monetizing Gold: A U.S. Perspective
An intriguing parallel to these mercantilist policies is the concept of monetizing gold, an idea gaining traction in the United States. Judy Shelton, Scott Bessent, and others have discussed issuing gold-backed treasury bonds. By doing so, the U.S. could leverage its gold reserves, turning them into a revenue-generating asset while restricting their physical export.
This approach fits neatly within the mercantilist framework. If Americans are incentivized to purchase gold bonds, it indirectly reduces the exportable supply of physical gold, effectively keeping wealth within the country. It’s a modern adaptation of resource nationalism, using financial engineering instead of outright bans. Consider it an accounting trick, but one that gives the US government free-market cover to keep its own precious stores of value stateside
