China is reportedly bid to expand its influence in the global gold market by offering to retain foreign central bank reserves within its borders.
According to Bloomberg, the People’s Bank of China has used the Shanghai Gold Exchange in recent months to market a friendly country’s central bank on the idea. At least one Southeast Asian country has shown interest, said those familiar with the issue.
This push will help Beijing strengthen its role as a bullion hub and reduce its dependence on Western financial centres. Custodian services are an important part of its infrastructure and help to attract more trading activities and increase reliability.
Gold analyst Jan Nieuwenhuijs said in X that foreign central banks have been able to store gold in Shanghai since 2014, but so far it is a minimal one. He added that one Southeast Asian country, possibly tied to the Mbridge cross-border payments project, may be assessing the options.
Timing comes as central bank demand supports strong gatherings in bullion.
Spot Gold set another record before it was slightly eased, reaching $3,784.74 in New York on Monday. Metals closed at $3,789.80 last week, up 43.59% since the start of the year, according to MarketWatch. It’s far outweighed Bitcoin’s 17% profit, a 12.96% increase in the S&P 500 and a 16.43% increase in the NASDAQ Composite.
Kitco News reported that despite the acquisition situation, analysts hope that gold’s bullish momentum will continue, citing trends in inflation and increased U.S. Treasury demand. Chris Mancini, co-portfolio manager at Gabelli Funds, said investors are turning to gold as a replacement for the dollar.
Still, China faces competition from established markets such as London, with its safes holding global reserves of over 5,000 tonnes. The World Gold Council ranks China fifth among central bank gold holders, but the domestic market for gems, bars and coins is the largest in the world.
