China is secretly buying up gold - the real volume may be 10 times higher
Beijing conceals large-scale purchases and actual reserves may exceed 5000 tonnes; the gold price broke through $4300 per ounce.
Beijing. Financial Times reports that China may be covertly buying up to 250 tonnes of gold per year - ten times more than officially declared (25 tonnes). This is based on analysts' estimates and data from the precious metals market.
Details of the FT investigation
Analysts suggest that real procurement is concealed for several reasons:
Beijing is actively moving away from the dollar and the part of reserves that may be subject to sanctions.
Purchases are made not only by People's Bank of China, but also military structures and state sovereign wealth fund - and they are not required to disclose data about volumes.
Almost all real transactions are not reported: The IMF sees only a third of officially declared global procurement.
Possible real reserves
According to analysts, the actual volume of Chinese gold may be:
exceed 5000 tonnes,
be twice as large, than Beijing officially announces to international regulators.
This level of reserves dramatically increases China's financial autonomy and its protection against currency risks.
Market reaction
This is against the backdrop of the publication and the general trend of «distrust of the dollar»:
the gold price broke through $4300 per ounce,
markets are in a state of heightened volatility,
is unknown, how many more central banks are hidden in their own safes, which creates a shortage in the global market.
Experts believe that China's covert purchases may be the «most underestimated factor» in the rise in the gold price in recent years.
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