Yesterday’s tweet from Donal Trump highlights one of the biggest Macroeconomic trends that I’ve been covering these last few years, notably since the beginning of the war in Ukraine, which is the emergence of a multipolar world order. Today, I’ll look into the resurgence of mercantilism and how China’s secret hoarding of gold both fuel this very dynamic.
China’s Covert Gold Accumulation
China has emerged as a significant covert buyer of gold, with the People’s Bank of China (PBoC) purchasing approximately 60 tons of gold in September 2024 alone. This buying spree began as early as May 2024, with substantial quantities being transferred from London to Beijing. According to customs data, gross gold imports into the Beijing region for September accounted for 69 tons, closely aligning with exports from the UK. However, there was a nine-ton shortfall explained by Swiss intermediaries acting as transit points.
These purchases occur off the balance sheet, with transactions designed to avoid disrupting market prices. Evidence also points to the Chinese People’s Liberation Army (PLA) as an active participant in these acquisitions, further underscoring the strategic importance of these operations. The PLA’s involvement ensures additional discretion by operating independently of traditional government oversight.
Mechanisms of Gold Transactions
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