FT Confirms Our Report From 2024 That China Is Buying 10x More Gold Than Officially Disclosed

Core Viewpoint - Gold prices have surged significantly, driven by central bank purchases, particularly from China, which is reportedly buying gold at a rate much higher than officially reported, indicating a strong bullish trend for gold in the coming years [1][9][12]. Group 1: Central Bank Purchases - China's actual gold purchases could be more than 10 times its official figures, with estimates suggesting total purchases could reach 250 tonnes this year, representing over a third of global central bank demand [12][23]. - Central banks are increasingly diversifying their reserves to hedge against geopolitical and financial risks, with Goldman predicting an average monthly central bank buying of 80 tonnes in late 2025 to 2026 [29][31]. - The opacity of gold purchases by central banks complicates market predictions, as many central banks choose not to report their gold activity to avoid market repercussions [19][21][26]. Group 2: Market Dynamics - The gold price has decoupled from ETF flows since the Ukraine war, but recent trends show a resurgence in ETF purchases, with the largest monthly inflow since mid-2022 occurring alongside increased central bank buying [16][36]. - Gold's share of global reserves outside the US has increased from 10% to 26% over the past decade, making it the second-largest reserve asset after the dollar [16]. - The combination of strong central bank demand and significant ETF inflows has contributed to a 10% rally in gold prices, marking the strongest monthly increase since 2016 [36]. Group 3: Future Projections - Goldman expects gold prices to rise to $4,900 by the end of 2026, with potential for even greater increases if private investor diversification into gold gains traction [37]. - The ongoing buying spree by Tether, which is diversifying into gold alongside T-bills, is also expected to support gold prices [36].