China is secretly buying a huge amount of gold – What is the plan behind the scenes?

Gold prices are hitting record highs, central banks are stocking up massively, and China appears to be secretly playing a dominant role in this shift. What’s going on?

China does not allow itself to be fooled

According to official figures from the International Monetary Fund (IMF), China added 1.24 tonnes of gold to its reserves in September. This data comes from the Chinese central bank, the People’s Bank of China.

But according to analyst Mike Haigh of Société Générale, that image is incorrect. He analyzed British customs data and found that China imported at least 15 tons of gold that same month. Total purchases have now reportedly risen to around 250 tonnes.

Why does China keep these purchases secret? According to gold expert Dominic Frisby, the country does not want to cause a commotion. If markets know that a buyer is active with such large volumes, it can fuel speculation and push gold prices further. That is exactly what China wants to avoid.

Unlike oil, whose production and transport are closely monitored worldwide, gold reserves are difficult to trace. The world is therefore largely dependent on what central banks themselves report.

Gold’s share in national reserves is rising sharply

Central banks worldwide hold large foreign reserves, often consisting of currencies, government bonds and gold. According to Deutsche Bank, at the beginning of 2025, about twenty percent of those reserves consisted of gold. This has now risen to thirty percent. This is not only due to additional purchases, but mainly due to the explosive rise in the gold price.

The US dollar is still dominant at forty percent. But if the gold price rises towards $4,100 per ounce, the precious metal could even take over that position.

According to Goldman Sachs, that scenario is not unthinkable. The investment bank expects that central banks will again add gold to their reserves on a large scale in 2026, as protection against geopolitical tensions and economic risks. The bank predicts that the gold price could rise to $4,381 as a result. That is exactly why author Robert Kiyosaki has been advocating gold as the ultimate protection against financial uncertainty for years.

Gold as an economic weapon for China

China’s obsession with gold is no coincidence. The precious metal plays a key role in the strategy to keep the national currency, the Renminbi, artificially weak. Due to the enormous trade surplus, the currency would normally increase significantly in value. But China wants to prevent that, because a weak currency provides cheap export products and therefore a competitive advantage on the world market.

While the Chinese central bank used to use its dollar income to buy US government bonds, this is now done in a roundabout way. The government revenues are spread across investment funds and state banks, which channel the money into American real estate, shares, corporate bonds and gold. This strategy largely takes place off-screen, but is becoming increasingly visible.