China wants to consolidate its position as an important player in the global gold market by trying to show himself a safe person to preserve foreign sovereign gold reserves. This step is a direct challenge for the traditional centers in London and New York, which aims to achieve various goals and face various challenges. Although experience worldwide is not new; This was preceded by models such as the Bank of England and the American Federal Reserve to preserve the gold of other countries, but China’s entry into this field can regain the strength card in the precious metal markets. Also read: An unprecedented number of central banks plan to improve gold reserves. What is the preservation of sovereign gold reserves, and how is it done practically? Keeping gold reserves means storing the precious metal according to the specifications of the ‘bomb attack in London’ in secure treasures in the name of a state or central bank, with accounting records showing ownership, and sometimes contracts specify the conditions for access, insurance and transfer. Conservation services, which protect the assets on behalf of clients, are a basic pillar of any gold trading center as it increases confidence and helps attract more transactions. According to the data published by the World Gold Council in June last year, 59% of central bank officials reported that they were using the local storage of part of their gold reserves, compared to only 41% last year. Despite the limited percentage, some central banks have revived the option to diversify external storage, an option that has not been mentioned in surveys since 2022. What steps does China take to play the role of the world’s gold treasury? China has already taken several steps to open its gold market. The Shanghai Gold Stock Exchange this year launched its first treasures and external contracts in Hong Kong. The Chinese Volksbank will use the Shanghai gold stock exchange to attract central banks in friendly countries to buy and store gold within China’s borders. Also read: China seeks to switch to the ‘Secretary of Conservation’ of global sovereign gold reserves, as the Chinese central bank plans to reduce restrictions on gold imports, with the aim of liberalizing the largest precious metal market in the world. According to ‘Bloomberg’, these efforts, which started months ago, received attention from at least one country in Southeast Asia. What are China’s goals of this step? China wants to achieve several goals behind the ‘treasury’ of global sovereign gold reserves. This step will strengthen Beijing’s role in the global financial system, while expanding its influence on the price of this important commodity. This step also supports its goal in establishing a world that is less dependent on the US dollar and the internationalization of the Yuan, as China is performing a large scale campaign to improve its role on the world scene and to compete with Western centers such as the United States, the United Kingdom and Switzerland. Are there international experiences to save and save gold? China’s attempt to become the ‘secretary of the conservation’ global sovereign gold reserves, not the first of its kind in the world; The bank of England is still the preferred place for most officials of the world’s central bank to store gold by 64%, an increase of 55% over the past year, according to a World Gold Council survey. The Bankbank of England contains more than 5 thousand tonnes of global gold reserves, and its value is estimated at about $ 600 billion, which determines the status of London as the largest center for the precious metal trade, according to “Bloomberg”. In the United States, the Fort Nox Castle is one of the most guarded buildings around the world, and was founded in Kentucky in 1936 to be the most important shop of gold reserves in the country, and it currently contains about 147.3 million ounces of gold, equivalent to half of the US Treasurer Reserve, according to the US data data. It might care: Why is gold the first safe haven … and what can it stop the Ascension? There is also a gold treasury in Gold Reserve in New York, which is located on the basement of its Manhattan headquarters, and it was built in the 1920s to protect gold reserves. American federalism also works as a secretary of conservation on behalf of foreign governments, central banks and international organizations, without allowing individuals or entities for its use. Today, the Treasury is the largest warehouse known for the allocated gold as an official reserve in the world, in 2024 about 507 thousand alloy with a total weight of 6331 metric tons, according to its website. The Swiss National Bank stores more than 70%of its total reserves of 1040 tonnes of gold in Switzerland, while the remaining percentage is distributed between the bank or England (20%) and the Canadian central bank (10%). The German Central Bank (Bundesbink) has the second largest gold reserve in the world with a size of 3352 tonnes, and a third of it is stored in the Federal Reserve in New York for reasons belonging to the Cold War and after World War II. As far as the rest of the reserves are concerned, they are distributed between the headquarters of the Bundesprick in Frankfurt, New York and the English bank in London, according to Reuters. What are the effects of China on the global gold market? If China becomes a center for storing foreign gold, it will increase its importance in the international financial system, and it is unable to ignore reserves and monetary policies decisions. China can benefit from its relations with countries kindly to expand its economic and political influence through these arrangements. On the other hand, some emerging countries may try to convert a part of their reserves into storage sites outside the system controlled by Western countries, or to avoid the risks of freezing assets, as happened to Russia after the invasion of Ukraine in 2022. Additional demand for gold, especially if very central banks can pay the prices of metal. Price differences can occur in the world markets according to the website, with the possibility of disability in some equity or higher transfer and protection costs, increasing the ownership costs. The countries looking for alternatives to traditional conservation may be an opportunity in China to diversify the risks, especially in light of financial disputes or sanctions. How much is China’s gold reserves and their arrangement worldwide? In the second quarter of 2025, China was sixth place in the world in terms of the volume of gold reserves, which amounted to 2298 tonnes with a value of approximately $ 243 billion, equivalent to $ 6.7% of the total foreign exchange reserves of the country. During August, the Chinese People’s Bank expanded its gold purchase series for the tenth month in a row, with its belongings with 0.06 million ounces to 74.02 million ounces, after adding about 1.22 million ounces since November. You can care: Gold in the treasures of the countries: Who is the leader? China faces challenges in its effort? Yes, since China does not have any bank market for alloys, and the trading on the Shanghai Stock Exchange remains very locally, “says Adrian Ash, Bullionvault research manager, who indicated that the Chinese Central Bank is eager to change it”, according to the Market Watch website. Ash believes that “building golden shares ready for rent and lending” is a basic step to create a banking market for alloys. But he confirms that there is still a less important step to reduce restrictions on the export of alloys from China “to make local prices closer to world prices.” Foreign investors must also exceed their fear of their gold beyond the borders of their countries, especially in communist China. Ash notes that foreign investors and governments who want to preserve part of its alloys “will have to rely on the rule of law and respect for property rights in the way London and New York have always enjoyed.”
China is trying to be the ‘gold treasury’ of the world. What is its meaning and effect?
