China’s Gold Rush Another Step Toward De-Dollarisation

SYNOPSIS

China’s gold rush isn’t just about wealth, it’s about power. Ten straight months of record buying signal a push to cut dollar dependence, strengthen future stability, and shake up global markets as prices surge worldwide.

China’s gold rush marks another step in its push toward de-dollarisation.

Introduction

When times get uncertain, people often look for something solid to hold on to. For nations too, gold has always been that ultimate anchor. Over the past year China has quietly but consistently been adding more of it to its reserves. At first glance this might look like a simple act of stockpiling wealth but in truth it signals a deeper move. Month after month China’s central bank has kept buying, showing this is not about chasing short term profits. Instead, it reflects a long term strategy aimed at reducing reliance on the dollar system and reshaping the financial landscape.

What the numbers show

China’s official gold reserves now stand close to 2298 tonnes as per latest reports. Its foreign exchange reserves went above 3.3 trillion dollars in August 2025. The gold part of this reserve is valued at more than 250 billion dollars which is huge compared to earlier years. Inside China the demand for gold bars and coins went up nearly 24 percent in the first half of 2025. Jewellery demand dropped by more than 25 percent because higher prices made it harder for families to spend on ornaments. So, people are turning to gold more for safety than for style.

On the global side gold prices have shot up almost 40 percent this year. This rise has been driven by strong central bank buying, fear of geopolitical risks and hopes that US interest rates may come down. China’s imports through Hong Kong more than doubled in July which shows strong appetite. China’s central bank is also working on simpler gold import and export rules. The idea is to extend licence periods, allow more ports to handle clearances and make licences reusable. All this will make cross border flows smoother.

Why it matters Gold acts as a safe shelter when currencies swing or when sanctions threaten trade. By building up gold China is cutting its exposure to the dollar system. Some analysts even feel China may be holding more gold unofficially than what it shares in public data.

Border and trade effects

These moves do not stop at China’s borders. Countries that deal closely with China may gradually prefer settling payments in yuan or in other local currencies. For countries like India higher gold prices increase import costs and shift how households invest in gold.

Conclusion

China’s appetite for gold is not just about reserves. It is a calculated step to secure its financial future and reduce dependence on the dollar. Whether this reshapes global finance or not, it shows that gold is back at the centre of economic power plays.

Raghav Chandak