China holds 33,000 tons of gold
FlyingFrisby founder Dominic Frisby said on Kitco that China's gold holdings are 10 times higher than what is publicly disclosed. FlyingFrisby is a London-based organization that invests in markets, including gold.
According to the World Gold Council (WGC), China is in a period of widespread gold buying, with an increase in gold reserves over the past 12 months. Specifically, according to the WGC, China is dominating the world gold market with very strong buying activities. In October 2023 alone, China bought an additional 23 tons, worth about 1.5 billion USD.
Also according to WGC, by the end of October, China had bought 204 more tons of gold compared to the beginning of the year, raising its total gold reserves to 2,215 tons, with a total value of more than 140 billion USD.
Despite leading the way in terms of cumulative gold holdings and imports in the first 10 months of 2023, Dominic Frisby told Michelle Makori, Group Leader and Editor-in-Chief at Kitco News, that China's actual gold holdings are much larger than the published figures.
Mr. Dominic Frisby said that China may be holding 33,000 tons of gold, equivalent to about 2,086 billion USD. This figure is about 15 times higher than the figure given by the WGC based on the figures announced by China itself.
China has huge ambitions, according to Frisby. China is the world’s largest producer and importer of gold, but its motto is “don’t shine too brightly,” he said.
Frisby calculates that China has mined about 7,000 tonnes of gold in the 21st century. More than 50% of China’s gold mining is done by state-owned entities, and China does not export the gold it mines. So all of it is stored domestically.
On the import side, there are no exact figures for how much gold China buys from Switzerland, Dubai, or London, but Frisby offers some estimates. Frisby notes that a lot of gold is being shipped to China through the Shanghai Gold Exchange. He claims that 22,000 tons of gold have been withdrawn from the Shanghai Gold Exchange this century.
In addition, there were about 4,000 tons of gold owned by the Chinese Government in 2000.
In total, Frisby estimates that China holds at least 33,000 tonnes of gold, half of which may be state-owned. That’s four times the amount of gold the United States holds.
Earlier in November, the World Gold Council said that China was dominating the global gold market with very strong buying activity. It is expected that the amount of gold purchased by central banks in 2023 will reach a new record. However, the numbers given by the WGC are quite small, being data released by the People's Bank of China (PBOC) and quoted by the WGC.
Countries race to buy gold, price could rise to 3,000 USD/ounce
Not only China, central banks of many other countries also increased gold purchases in the context of global uncertainty, geopolitical crises occurring in many regions of the world, and stock markets in many countries were in turmoil. Money flows to safe channels, including the US dollar and gold.
The WGC raised its forecast that central banks will set a new record for net gold purchases this year, surpassing the record set in 2022. In the first 10 months, countries bought 800 tons of gold, worth nearly $51 billion, up 14% from the same period last year. In 2022, these giants bought a record 1,135 tons.
Many experts acknowledge a trend, China may consider supporting the Yuan with gold. This is also a factor that can push gold prices to approach $3,000/ounce (about VND90 million/tael) in 2024.
With the above world price, the gold price in Vietnam could reach 100 million VND/tael.
The global gold rush has been quite evident since the beginning of the year, reflected in the actions of central banks in emerging markets.
In fact, gold has long been considered a safe haven when the world is in turmoil. This has been further confirmed by the outbreak of the Covid-19 pandemic, the Russia-Ukraine conflict, and recently the Israel-Hamas conflict, soaring global inflation, rising national debt, and an unstable global banking system...
Previously, some organizations also predicted that gold could soon rise to a record high of 3,300 USD/ounce, equivalent to 1980, when inflation skyrocketed due to the impact of oil prices and instability in the Middle East.
Some gold funds also believe that gold will enter a "new bull market", with prices exceeding $2,100/ounce in 2023.
In fact, in recent sessions, gold prices have skyrocketed and are returning to the $2,000/ounce threshold.
World gold prices increased sharply in the context of the continuous decline of the USD. The DXY index - measuring the fluctuations of the greenback against a basket of 6 major currencies - fell sharply from 106 points to 104 points. The US has just announced lower-than-expected inflation, strengthening the belief that the US Federal Reserve (Fed) will not raise interest rates further. Experts from BofA BofA Global Research believe that the Fed's interest rate hike cycle has ended.
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