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Western analysts have long speculated that the Chinese Communist Party has been underreporting its Gold purchases, raising concerns about the true scale of its stockpile. In late 2024, official data from China revealed a six-month hiatus in Gold buying by the central bank, which seemed to contradict previous patterns of acquisition.
However, this official pause in purchases contrasted with other data sources, such as records published by the UK government. These records, which track the export of non-monetary gold, revealed that China was still actively buying gold from London during this period, often when Gold was trading at lower prices locally.
This discrepancy between China’s official declarations and international trade data has fueled ongoing speculation about the true extent of China’s Gold reserves and the strategic motives behind its purchasing behavior.
A review of Chinese Gold buying data as declared by The People’s Bank of China and through Gold export Data published by the UK Government
The data from the chart comparing UK gold exports to China and the People’s Bank of China (PBOC) reported purchases reveals significant trends and discrepancies. While the UK government’s export data shows substantial fluctuations in gold sales to China, with a noticeable peak in October 2022 (72.88 tonnes), China’s own declared gold purchases, as reported by the PBOC, tell a different story.
Over many months, particularly from May 2022 to June 2023, the UK exported large quantities of gold to China (ranging from 4.83 tonnes to 72.88 tonnes). However, the PBoC’s reported purchases were far less in comparison. For example, in May and June 2022, there were no declared purchases by China, despite the UK exporting significant amounts of Gold.
The PBOC began reporting substantial Gold purchases starting in July 2022, with figures such as 32.04 tonnes in July and 30.17 tonnes in August. These purchases are much higher than any previous months, signaling an increase in China’s interest in Gold at that time. However, even in months where UK exports were notably high, such as September 2022 (50.10 tonnes), China’s reported purchases remained significantly lower.
In the latter part of 2023, China’s reported purchases dropped sharply, with no Gold purchases reported at all in several months, including January, February, and March of 2024. This pause occurred despite continued UK exports, including significant shipments in May and June 2024.
During periods when Gold prices were lower in the UK market, such as early 2023, the UK still exported significant quantities of Gold to China. However, China’s reported purchases did not always reflect these quantities, suggesting that there may be other dynamics at play—such as off-market transactions, or a discrepancy between actual purchases and official reporting.
These trends raise questions about the transparency of China’s Gold purchases and suggest that the PBoC may be underreporting its gold acquisitions to maintain economic or strategic discretion. The mismatch between official Chinese data and international export records underlines the complexities in tracking the true scale of China’s Gold stockpiling efforts.
The clue to who the Gold buyer from London was in October is given away by the Chinese Gold market discount at the time
In October 2024, Chinese Gold prices were consistently lower than those in London, creating a price differential that would normally discourage imports of higher-priced Gold from London to China, especially as gold is traded on the Shanghai Gold Exchange (SGE) for liquidity.
UK data shows continued Gold export to China, suggesting that the buyer was likely the PBOC. As a central bank, the PBOC is less concerned with short-term price differences and more focused on long-term accumulation of Gold for its reserves.
Other Chinese institutions such as bullion banks would not import Gold just to sell at a loss on the SGE, which shows that the buyer of this Gold would have been the PBoC
This is strong evidence that the PBoC has been buying undeclared Gold to not alert the market as to the scale of their true position. By only declaring a small volume of Gold purchases, the market assumes far less urgency in accumulating physical Gold than is actually the case for the Chinese State
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