China's Crypto Game: 14 Months of Gold Stockpiling & 9 Tonnes Purchase

• China's Extensive Accumulation of Gold Reserves
• BRICS Countries - The New Titans in Gold Accumulation
• Speculations on a Gold-Backed BRICS Currency
• China's Persistent Gold Buying
• Potential Impact of a Gold-Backed BRICS Currency
• Gold - A Temporary Support?

China's Extensive Accumulation of Gold Reserves

Throughout 2022 and 2023, China, as a BRICS member, significantly increased its gold reserves, marking 14 months of consecutive growth. This surge in gold accumulation has made it the top purchaser of the precious metal in the previous year. As per the most recent data, China added 9 tonnes (290,000 ozs) of gold to its reserves in December 2023 alone, costing a whopping $532 million. In 2023 alone, China bolstered its reserves by 225 tonnes of gold.

BRICS Countries - The New Titans in Gold Accumulation

China is not the sole BRICS nation that has been amassing gold since 2022; other countries of the alliance, including Russia, India, and South Africa, have also been steadily purchasing the precious metal over the past 14 months. According to the World Gold Council, the BRICS alliance was the largest buyer of gold in 2023.

Speculations on a Gold-Backed BRICS Currency

The rapid accumulation of gold by BRICS countries over the past 14 months has triggered speculations. Some suggest that the rush to buy gold could be in preparation for backing the upcoming BRICS currency with the precious metal, while others believe it could be a strategic investment decision to diversify their reserves. However, the real reason behind this mass purchase of gold by BRICS nations remains undisclosed.

China's Persistent Gold Buying

The People's Bank of China (PBoC) continued its gold buying spree in December, adding another 9 tonnes (290,000 ozs) to its reserves. In total, the PBoC added 225 tonnes of gold in 2023 and now holds 71.87 million ozs of gold (2235.4 tonnes).

Potential Impact of a Gold-Backed BRICS Currency

If the BRICS alliance decides to back their new currency with gold, it could potentially strengthen their standing in the global markets. Traditionally considered a safe asset, gold can provide the alliance with the necessary support during the roll-out of their new currency.

Gold - A Temporary Support?

However, the support from gold can only provide initial stability but may fail to ensure long-term sustainability for the currency. Gold prices are subject to market risks and a strong US dollar could potentially drive down the price of the precious metal.

Edited by Jonathan Stoker