Report: China Suspected of Stockpiling Gold to ‘Cut Greenback Dependence’

Report: China Suspected of Stockpiling Gold to ‘Cut Greenback Dependence’

During the first week of November, the World Gold Council’s (WGC) report that covered last quarter’s global gold demand noted that central banks worldwide purchased close to 400 tons of gold in Q3 2022. The study highlighted that it was the “most on record,” and the WGC researchers also spotted a “substantial estimate for unreported buying.” A report published on Nov. 22 now says the mystery gold buyer is likely China, and it further alleged that the country “bought a substantial amount of gold from Russia.” The Third Quarter’s Mystery Gold Buyer Is Likely China, Market Analyst Says

According to a report published by Japan’s Nikkei news outlet, China is suspected of stockpiling gold to “cut greenback dependence.” Nikkei’s report follows the recent study published by the World Gold Council (WGC) that shows a large amount of gold purchased by the world’s central banks last quarter.

At the time, the WGC report further noted, “unreported buying” and a mystery buyer that acquired substantial amounts of the precious metal. However, the WGC’s quarterly report does not disclose the mystery gold buyer’s identity.

Nikkei’s article suggests the mystery buyer is thought to be China, and the move is meant to cut China’s dependence away from the U.S. dollar. Speaking with Nikkei’s reporter, the precious metals analyst, Koichiro Kamei, told the publication that the magnitude of the mystery buyer’s gold purchases is “unheard of.” It is believed China holds between 1842.60 to 1948.31 tons of gold, according to stats recorded by the World Gold Council. March 2022 data indicates that China was ranked sixth in terms of countries with the most gold reserves. Other reports believe China may be hoarding a lot more gold than what’s been recorded since 2019.

The market analyst, Itsuo Toshima, believes the country likely purchased a large sum of gold from the Russian Federation. “China likely bought a substantial amount of gold from Russia,” Toshima told the Nikkei reporter.

It’s not the first time China has been secretive about gold purchases as China has not been actively reporting gold holdings and purchases since 2019. Furthermore, the People’s Bank of China surprised the globe in 2015, as the public found out the central bank was stockpiling tons of gold secretly since 2009.

China’s gold stockpiling scheme is one of the many moves that possibly aim to distance the country’s financials from the U.S. dollar. At the end of October, economists discussed how Russia and China could potentially develop a gold-backed currency that could undermine the greenback.

Furthermore, Russia and members of the BRICS countries revealed plans in June to create a new international reserve currency. Saudi Arabia requested to join the BRICS nations at that time as well.

At the end of October, Rich Dad Poor Dad author, Robert Kiyosaki, cited Saudi Arabia’s request to join BRICS as one reason why he believes the U.S. dollar is toast. Nikkei’s article also notes that the Chinese government has been “unloading U.S. bonds” and in recent times China has been getting rid of billions in U.S. debt.

The market analyst Toshima told the Nikkei staff writer, Munemasa Horio, that the “People’s Bank of China likely bought a portion of the Central Bank of the Russian Federation’s gold holdings of over 2,000 tonnes.”

WGC statistics say the Russian Federation held around 2,298.5 metric tons of gold as of January 2022. While China is thought to be the sixth largest nation for the amount of gold it has on reserve, Russia is ostensibly the fourth-largest nation in Europe in terms of gold reserves. Tags in this story BRICS Nations, BRICS reserve currency, Central Bank of the Russian Federation, Central Banks, Gold-backed currency, international reserve currency, Japan"s Nikkei, Munemasa Horio, Nikkei, Nikkei Asia, PBOC, People"s Bank of China, Russia, Saudi Arabia, U.S. bonds, U.S. debt, U.S. dollar, United States, WGC report, World Gold Council

What do you think about the report that says China is stockpiling gold to cut dependency from the U.S. dollar? Let us know what you think about this subject in the comments section below. Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today. Amazon Founder Jeff Bezos Advises What Consumers and Businesses Should Do as Recession Looms ECONOMICS | 2 days ago Nigeria"s Rising Inflation and Foreign Exchange Shortages Fueling Devaluation Speculation — IMF Mission ECONOMICS | 3 days ago

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