China's Secret Gold Purchases Create Uncertainty in Markets

China's Gold Purchases: Beyond Official Data

As part of its efforts to reduce dependence on the US dollar, China's gold purchases are creating uncertainty in the financial world. Research suggests that China's gold purchases could be more than ten times the amounts reflected in official records. Experts indicate that this situation could significantly affect demand dynamics in the gold market.

Predictions of 250 Tons in Hidden Purchases

This year, the People's Bank of China has publicly announced gold purchases amounting to only 25 tons, but market analysts express that these figures do not truly reflect the actual situation. One prominent prediction is that analysts from Société Générale, based on trade data, estimate that total purchases could reach 250 tons. This figure corresponds to more than a third of global central bank demand.

Dollar Dependence and Hard-to-Track Purchases

Carlyle analyst Jeff Currie emphasizes that the primary aim of China's gold purchases is to reduce dollar dependence and that tracking these purchases has become nearly impossible. Traders are monitoring the serial numbers of 400-ounce bars produced in Switzerland or South Africa to predict China's purchases.

Increasing Central Bank Purchases and Decreasing Reports

Rising central bank purchases in recent years have led gold prices to exceed $4,300 per ounce. According to the World Gold Council, the share of gold in global reserves outside the US has increased from 10% to 26% over the past decade. However, the reporting of these purchases has significantly decreased over time. Four years ago, 90% of central bank purchases were reported, while today this rate is around one-third.

Purchases Hidden for Political Reasons

The concealment of gold purchases by certain countries is explained for political reasons. Experts point out that buying gold as an anti-dollar reserve instrument has the potential to create issues in relations with the US. This situation emerges as a factor leading to an increase in hidden purchases.