Loading ...China may be secretly stockpiling gold. Why that spells trouble for the U.S. dollar.
China’s central bank has been buying physical gold to add to its reserves for at least the past three years — and there’s growing speculation that the country may be purchasing even more of the metal in secret as part of a strategy to reduce its reliance on the U.S. dollar.
The West at the time froze Russia’s foreign-exchange reserves — the U.S. dollar and euro . That was the “moment the dollar was weaponized in a way never seen before, which scared foreign central banks and spurred them to buy record amounts of gold,”
“Given how much gold it’s buying, it’s quite sensible for China to limit public disclosures where possible,” said Stefan Gleason, president and chief executive at Money Metals. “After all, it’s not in the interest of any bona-fide buyer to take actions that make its purchases more expensive than they need to be.”
“Putting aside a black-swan event like a war escalation, new weakness in the stock and bond markets and/or a lurch toward a dovish Fed are the most likely catalysts for higher gold prices,” said Gleason. Fed Chairman Jerome Powell’s days may be numbered — “and so is his stance against further rate cuts.”