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China, Central Banks Keep Buying Gold


Is the U.S. dollar the target? I BY RANDOLPH SMYTHE


n october, gold broke a new record, exploding past $4,000 an ounce — setting a new all-time record for the pre-


cious metal. As gold hit $4,300 an ounce, JPMorgan’s CEO Jamie Dimon was asked about the soaring price. “I’m not a gold buyer — it costs


4% to own it,” Dimon told Fortune’s financial conference in late October. “But it could easily go to $5,000 or $10,000 in environments like this.” “This is one of the few times in my


life it’s semi-rational to have some in your portfolio.” What’s driving the new investor paradigm on gold? The first answer may be simple:


central banks, especially China’s. The World Gold Council (WGC)


says central banks have bought more than 1,000 tons of gold in each of the last three years — a modern-era streak — cementing the metal’s come- back as a reserve anchor. China is said to have led the pack


in its public — and private — gold pur- chases. Some say it’s hoarding gold. In its 2025 Central Bank Gold


Reserves survey, the WGC reports that 95% of reserve managers expect global official gold holdings to rise again over


12 NEWSMAX | DECEMBER 2025


the next 12 months. Wall Street, too, has had to update its models. “Structurally higher central bank


demand will add 9% to the gold price by year-end,” Goldman Sachs wrote earlier this year as it lifted its forecast, adding that stronger official buying — 50 to 70 tons a month — could pull prices even higher.


CHINA’S LEADING ROLE No country has drawn more attention than China. After an 18-month buying streak


through early 2024, the People’s Bank of China (PBOC) officially resumed modest additions this year, tak- ing stated gold reserves to roughly 2,285 tons — about 6% of its report- ed reserves — by January. Even after occasional pauses, that official tally has been trending higher since late 2022. But the more controversial story


is what Beijing may be buying off the books. Analysts have long noted a gap


between the WGC’s top-down esti- mates of central bank demand and self-reported purchases — an “unre- ported” category that some experts attribute largely to China. As one researcher told Kitco, a plausible method is to “take 80%


of total unreported purchases” as a proxy for PBOC’s hidden flows, then add the officially disclosed buys. It’s an estimate, not a certainty —


but it helps explain why Swiss export data and Shanghai market dynamics often point to far more physical metal entering China than official reserve updates would suggest. The trade plumbing bears this out. Switzerland, the world’s refining


hub, has seen shipments to China jump at various points this year, a sign that Chinese demand — con- sumer, institutional, and poten- tially official — continues to pull metal East.


WHY GOLD NOW Reserve managers give consistent reasons: gold has no counterparty risk; it diversifies portfolios; and it’s a proven crisis hedge. The WGC’s 2025 survey highlights


that nearly three-quarters of respon- dents expect the U.S. dollar’s share of global reserves to be “moderate or significantly lower” five years from now — a polite way of saying diver- sification away from dollar assets is still underway. Geopolitics sharp- ened those incentives. The freezing of Russia’s reserves


in 2022 reminded policymakers that fiat assets held abroad can be sanc- tioned; gold held at home cannot. Meanwhile, higher deficits in


major economies, shifting trade poli- cies, and periodic bouts of banking- system stress have kept the appetite for real assets alive. HSBC and Goldman have both


argued that official-sector buying — alongside ETF inflows during peri- ods of falling rates — has been the key marginal driver as bullion set successive records in 2025. Shaokai Fan, WGC’s central bank


chief for Asia-Pacific, put it this way earlier in the year: “Central bank and investor buying have more than offset a notable deceleration in con- sumer demand,” with Asian inves- tors a “near constant presence” and a


GOLD/HERNAN4429/GETTY IMAGES


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