China Is Secretly Buying Up Gold On A Record Scale

Metal prices are at a record high.

Gold prices rose to more than $4300 per ounce due to large-scale secret purchases by China, which are much higher than the official data. It is noted that this creates an artificial deficit in the market and increases its volatility, as traders can not predict the real supply.

This is reported by Financial Times. The main reason analysts call China's large-scale secret purchases, which far exceed official data and create serious difficulties for traders and investors.

Beijing is seeking to diversify reserves, reduce dependence on the U.S. dollar and build up gold reserves so much that even the most accurate forecasts become conditional. Official statistics look modest: in recent months, China has declared purchases of only 1.9-2.2 tons per month, which does not correspond to actual demand.

Experts analyzing the trading data suggest that China's actual purchases this year could reach 250 tons, which is more than a third of global central bank demand. Such undeclared purchases create difficulties for traders who cannot predict price movements for the key precious metal.

"China is buying gold as part of its de-dollarization strategy," notes Jeff Curry, director of strategic directions at Carlyle. He notes that unlike oil, which can be tracked by satellites, gold cannot be tracked.

Because of distrust in official statistics, traders are forced to use proxies to gauge real demand. Among them are orders for 400-ounce bars, which are usually bought by central banks, and data on gold exports from London to China. Using such methods, Société Générale analysts and calculated potential imports of 250 tons a year.

Other estimates are even higher. For example, Beijing-based consulting firm Plenum Research has calculated a gold "deficit" of more than 1,300 tons per year, which is six times higher than China's declared volumes. In addition, China is one of the world's largest gold producers - about 10% of global production. It is noted that this allows buying gold directly from its own mining companies, bypassing international markets.

China's situation is part of a global trend, as central banks are increasingly active in buying gold, but do it covertly. According to the World Gold Council (WGC), only about a third of purchases are officially declared, up from nearly 90% four years ago. Central banks hide their operations in order not to influence the price of gold and for political reasons.

You can support the website Charter97.org

MULTI-CURRENCY ACCOUNT FOR ASSISTANCE:

Bank's name: Bank Millennium S.A.
Address: ul. Stanislawa Zaryna, 2A, 02-593, Warszawa
IBAN: PL97116022020000000216711123
SWIFT: BIGBPLPW
Name of the account holder: Fundacja “KARTA ‘97”
Purpose/title of payment: Donation for statuary aims

You can contact us by the e-mail [email protected]