China Builds Gold Reserve Amid Dollar Volatility Fears

China's official gold reserves have increased by about 124% since 2008, from 1,054 metric tonnes to approximately 2,366 mt. However, this figure may not accurately reflect the country's total gold holdings. Estimates suggest that state entities, such as the State Administration of Foreign Exchange (SAFE), may hold an additional 2,334 metric tonnes in unreported gold reserves.

This would bring China's estimated total gold reserves to around 4,700 mt, roughly 58% of U.S. gold reserves of 8,133 mt. If true, this would make China the second-largest sovereign gold holder in the world after the U.S. and surpass countries like Germany, Italy, and France.

China's reported official gold holdings are still relatively low compared to its massive money supply and debt burden. The idea of a gold-backed Chinese yuan is considered unlikely, as China lacks the financial markets and rule of law needed to rival the U.S. Treasury market.