China’s gold stockpiling is dollar warning sign

Asia Times/William Pesek/11-24-2022

“One of the worst-kept secrets in global central banking is the extent to which Chinese officials are swapping dollars for gold. Governor Yi Gang’s team at the People’s Bank of China isn’t admitting as much. The PBOC doesn’t have to, though, given the clear policy trajectory Chinese leader Xi Jinping has pursued in recent years: internationalizing of the yuan as the top rival to the dollar.”

USAGOLD note 1: Though it is impossible to get a fix on China’s involvement in the gold market without an admission from the Peoples Bank of China, this article does a good job of shifting through the inferences. Not that it matters, China is very judicious about its gold purchases, and not given to running up prices. It waits until the metal becomes available rather than bidding up the market to encourage sellers. Market experts have hypothesized that Russia has sold gold directly to China in recent months.

USAGOLD  note 2:  Pesek saves his most intriguing comment for last: “Yet the longer-term trajectory for global currency markets remains dollar-negative as China and other top Treasuries-holding powers switch into an asset John Maynard Keynes once dismissed as a ‘barbaric relic.’ That relic is now flashing red alert for dollar bulls.”