
tl;dr
China has reduced its US Treasury holdings for the third consecutive month, dropping from $784.3 billion in February to $756.3 billion in May. Concurrently, China is increasing its gold bullion accumulation, with speculation that its actual gold purchases far exceed official reports. Experts suggest...
China has reduced its US Treasury holdings for the third consecutive month, shifting its focus towards accumulating large quantities of gold bullion. Recent US Treasury data reveals that China lowered its Treasury bill holdings by $900 million, moving from $757.2 billion in April to $756.3 billion in May. This marks a continued decline since February, when China possessed $784.3 billion in US bonds.
Speculation is growing that China's gold purchases far exceed what public records indicate. Stefan Gleason, president and CEO of Money Metals, suggests that China may intentionally underreport its gold acquisitions to avoid driving up costs. He explains that minimizing public disclosures helps keep purchase prices lower, which is a sensible strategy for a buyer of this magnitude.
Joseph Cavatoni, a market strategist at the World Gold Council, acknowledges ongoing debate about whether the People’s Bank of China’s reported gold purchases truly reflect its activity. He points out that there might always be undisclosed transactions contributing to the actual gold reserves.
Furthermore, analyst Jan Nieuwenhuijs of Money Metals estimates that China’s real gold holdings are likely more than double the officially reported figure. He claims that by the end of 2024, the PBOC held approximately 5,065 metric tons of gold, compared to the reported 2,280 metric tons. Nieuwenhuijs supports this by noting China’s gold imports surpass what is sold through the Shanghai Gold Exchange and what insiders have shared over time.
The World Gold Council’s latest data officially lists China’s gold reserves at 2,296 tonnes, valued at over $247 billion. However, the narrative suggests that China's true gold hoard is substantially larger, underscoring a strategic pivot from US bonds to bullion amidst evolving global financial dynamics.