China's Gold Grab Is Just Getting Started -- And It Could Break the Dollar

3 weeks ago 24

Khac Phu Nguyen

Tue, Apr 15, 2025, 8:36 AM 1 min read

China isn't conscionable buying goldit's hoarding it. Trading volumes connected the Shanghai Futures Exchange conscionable exploded to their highest successful a year, fueled by a stampede of investors, refiners, and adjacent banks hedging against rising geopolitical heat. A caller commercialized warfare is brewing betwixt the US and China, and home buyers are treating golden similar a strategical weapon. Prices successful China are present commanding a $20 premium implicit planetary ratesa implicit U-turn from past year's discount epoch erstwhile request slumped.

Warning! GuruFocus has detected 4 Warning Signs with GS.

The People's Bank of China softly added different 2.8 tons to its reserves successful Marchits 5th consecutive period of buying. Sound familiar? It should. The past clip this happened was during Trump's archetypal commercialized war. But this time, the question is broader. Retail investors are smashing ETF records, pouring successful $1.7 cardinal past week alone. According to State Street's Aron Chan, this request is much than conscionable a short-term playit's sticky, cultural, and resilient. Add to that golden accumulation plans from large banks and surging request for concern bars, and you've got a multi-layered bid that doesn't flinch.

And it's not conscionable astir diversification anymoreit's astir survival. Treasuries are losing their haven halo arsenic spot successful dollar-denominated assets cracks. Goldman Sachs (NYSE:GS) present sees golden hitting $3,700 by year-end, perchance adjacent touching $4,000 by mid-2026. Vasu Menon astatine OCBC says it plainly: if China wants retired of the dollar trap, it'll bargain much goldand fast. For planetary investors, the connection is clear: erstwhile the world's second-largest system treats golden similar an economical defence system, you wage attention.

This nonfiction archetypal appeared connected GuruFocus.