Hong Kong Gains Ground on London as China Shifts Gold Reserves

China's gold reserves are shifting from London to Hong Kong in 2026, a move that will reshape the global gold market. This change is not just about geopolitics, but rather about competing financial infrastructures and which one holds the most physical metal during Asian trading hours.

London's position as the world's gold pricing capital was built on unallocated gold accounts, where central banks deposit gold into a shared pool that commercial banks can borrow, lease, and deploy. This arrangement created a deep and liquid market that no other financial centre could replicate at scale.

However, when sovereign metal leaves this pool, the rates tighten, and the cost of gold-backed financing rises across the system. China's People's Bank of China has been accumulating gold reserves for 20 consecutive months, with the largest single-month addition in June 2026 being 14.93 tonnes.

The PBoC is building physical gold inventories specifically in Hong Kong and repositioning existing reserves away from London. This move will strengthen Hong Kong's market share and directly influence international gold prices through its Precious Metals Central Clearing Company (PMCC).