China Poised to Overtake US Gold Reserves Within Five Years

China's gold reserves have been growing at an accelerated pace, and analysts at BMO Capital predict they could surpass those of the United States within five years. Officially, China holds around 2,346 tonnes of gold, but this figure is likely a significant underestimate due to the Chinese central bank's practice of covertly buying gold.

Last year, researcher Jan Nieuwenhuijs at Money Metals found that the People's Bank of China bought an additional 570 tonnes of gold in 2024, which was not reported publicly. Goldman Sachs analysts also estimated that China bought over 48 tonnes of gold in May via the London over-the-counter market.

BMO Capital estimates that the People's Bank of China holds around 5,200 tonnes of monetary gold, which represents about 13 percent of the total above-ground gold supply. This rapid accumulation of gold reserves gives China significant leverage in global pricing and could shift more power from traditional Western centers to China.

The accelerated pace of Chinese gold buying has sparked concerns that the country may be positioning itself to become a major player in the global gold market, potentially challenging Western dominance. Hong Kong's launch of its gold clearing and settlement system earlier this month aims to attract more international gold trading activity and could shift pricing power towards China.

BMO analysts note that achieving the U.S.'s level of gold reserves is an absolute minimum target for China, implying another 2,500-3,000 tonnes of purchases over the next two to five years. However, aspirations are likely higher, given China's need to establish RMB credibility globally.