Sou Hu Cai Jing·2025-11-08 02:15Core Viewpoint - The People's Bank of China (PBOC) has been increasing its gold reserves for 12 consecutive months, reaching 7.409 million ounces (approximately 2304.5 tons) by the end of October, with a significant rise in the proportion of gold in foreign exchange reserves to 8.89%, a historical high [1][3]. Group 1: Gold Reserve Increase - The PBOC has adopted a "low volume, multiple times" strategy for gold accumulation, increasing reserves from 160,000 ounces in January to 30,000 ounces in October, totaling over 800,000 ounces for the year [3][10]. - The current market value of China's gold reserves is approximately $297.2 billion, while foreign exchange reserves have stabilized above $3.3 trillion, the highest level since December 2015 [3][10]. - This trend is not isolated to China; globally, central banks purchased a net 220 tons of gold in Q3, a 28% increase from the previous quarter, indicating a collective action among central banks [3][10]. Group 2: Reasons for Accumulating Gold - The primary reason for the PBOC's gold accumulation is to hedge against geopolitical risks, providing a form of insurance for national wealth amid global instability [5][6]. - The strategy also aims at "de-dollarization" of foreign exchange reserves, reducing reliance on a single currency and enhancing asset stability [7][8]. - Additionally, increasing gold reserves supports the internationalization of the Renminbi, as a stronger gold backing enhances confidence in the currency among other nations [8][10]. Group 3: Future Trends - The PBOC is expected to continue increasing its gold reserves, as the current gold proportion in foreign exchange reserves is still below the global average of 15% [10][11]. - Long-term predictions indicate that gold prices may rise, potentially exceeding $5,000 per ounce by 2026, despite short-term volatility due to factors like interest rate changes [11][12]. - The global monetary system is shifting from a dollar-dominated framework to a more diversified one, with rising gold and Renminbi shares, which will significantly impact trade, investment, and wealth allocation strategies [12][14].