The end of the dollar: China is secretly buying tens of tons of gold: EADaily

China’s central bank is secretly buying gold, despite promises to the contrary. This is due to fear of dollar depreciation. writing Pravda.Ru.

According to Gainesville Coins analyst Jan Nieuwenheys, gold is bought in London from Western banks, which in turn deliver it to China. Nieuwenhuis found that the supply of gold in the Chinese gold market exceeded demand, and “circumstantial evidence” led him to conclude that “the surplus was at least 400 tons.” This surplus in the Chinese gold market was not purchased by the PBOC through the Shanghai Exchange, but “was imported in 400 ounce bars from the United Kingdom and secretly purchased by the People’s Bank of China.”

The expert made his conclusions based on an analysis of UK customs data. They show that the NBK “continued to buy gold in the amount of 53 tons in May.

This is because the customs data going through the International Commodity Trade Statistics (IMTS), all gold reported is “non-monetary”, meaning it is not owned monetary authorities such as central banks. The UN IMTS rulebook states that silver gold is treated as a financial asset and not a commodity by customs authorities, so transactions related to it should be excluded from IMTS.

When the banks send the gold out of the UK it becomes ‘non-monetary bullion’, but when it arrives in China it is financed (changes ownership) and placed in PBOC vaults, apparently in Beijing. This strategy allows the PBOC to understate its gold purchases into cool markets and continue to add gold to its reserves at lower prices, the author notes. to write

Nieuwenhuis believes that since the beginning of the CBO, when at the beginning of 2022 the West froze the foreign exchange reserves of the Central Bank of the Russian Federation in the amount of $ 300 billion, the UK began to export 400-ounce bars to China in large numbers. books and this is no coincidence.

“Since then China has taken control of gold prices from the West and broken the relationship between gold prices with ‘real rates’ (ten-year bond yields),” – writes the author.

According to the analyst, there is no reason for China to stop buying gold because of the need to diversify its foreign exchange reserves.

The People’s Bank of China also buys gold from Switzerland and other countries – flows that may be included or excluded from customs reports, but Nieuwenhuis does not have access to the data that.

In March, he revealed a secret stockpile of gold held by the PBOC, saying it could stockpile more than 5,300 tonnes to prepare for the impending devaluation of the US dollar.