China Poised to Overtake U.S. in Gold Holdings Within Five Years

While global gold prices have faced a period of correction, persistent demand from Beijing continues to provide a critical floor for the market. New analysis from BMO indicates that China’s actual gold stockpile is significantly higher than official reports suggest, with approximately 30,000 tonnes held above ground. This volume accounts for roughly one-third of global demand flows, positioning China as the primary force behind current price stability.

BMO estimates that the People’s Bank of China currently holds 5,200 tonnes of gold, representing about 13% of the world’s supply. To match the U.S. Federal Reserve’s gold-to-M2 money supply ratio, China would eventually need to acquire an additional 13,000 tonnes. Even reaching the absolute minimum target of matching U.S. total reserves would require the purchase of up to 3,000 tonnes over the next two to five years. Recent data supports this trajectory, with the central bank acquiring 15 tonnes in a single month—the largest monthly intake since October 2023.

Beyond simple accumulation, China is actively decentralizing the gold market. By expanding Hong Kong’s infrastructure for clearing and settlement and strengthening links with the Shanghai Gold Exchange, Beijing is systematically shifting price discovery power away from traditional Western financial hubs. This expansion of futures and over-the-counter market liquidity serves as a core pillar of China's broader objective to elevate the yuan’s international standing.