China’s official gold holdings remain well below the US level, yet estimates based on unreported purchases imply the gap may be narrower than headline data suggest. The US reports just over 8,133 tonnes, while China reports 2,346 tonnes, although the People’s Bank of China disclosed only a 41-tonne rise in 2024 as separate analysis put covert buying at 570 tonnes. In May, estimates pointed to more than 48 tonnes bought via London’s OTC market, while the official reserve increase was 10 tonnes; other assessments place China’s monetary gold at more than 5,000 tonnes by end-2024, and another estimate at 5,200 tonnes, or about 13% of above-ground supply.
At current accumulation rates, projections argue China could overtake the US in less than five years, with additional purchases of roughly 2,500–3,000 tonnes framed as feasible within two to five years depending on approach. US gold reserves are described as around 5% of M2, and reaching the same ratio for China is associated with a requirement of around 18,000 tonnes. Separately, Hong Kong has begun trial operations of a gold clearing and settlement system intended to mirror LBMA infrastructure, alongside plans for a new HAU price ticker.
Implications Of Covert Chinese Gold Buying For Derivatives Traders
We believe derivative traders must aggressively reposition their portfolios in the coming weeks to capitalize on China’s massive, covert gold accumulation. While official records show modest updates, under-the-radar buying suggests the Chinese central bank actually holds over 5,000 tonnes of gold, more than double its public figures. This hidden demand creates a highly resilient floor for global gold prices that standard models are completely overlooking.
In late July 2026, gold continues to demonstrate remarkable strength, trading comfortably above $2,400 an ounce as global demand remains robust. Recent trading data reveals that Asian over-the-counter markets are experiencing record-breaking volumes, with Shanghai Gold Exchange premiums consistently outpacing London benchmarks. To leverage this trend, we recommend focusing on long-dated call options to capture the structural upward momentum while avoiding short-term noise.
Strategic Positioning As Gold Hubs And Pricing Shift East
Furthermore, the expansion of new gold clearing and settlement infrastructures in Hong Kong is rapidly shifting pricing power from Western centers to the East. This development means we must look beyond traditional exchanges like COMEX and diversify our derivative exposure into highly liquid Asian hubs. Exploiting the widening spreads between Western and Eastern gold prices via arbitrage strategies will likely yield significant returns in August.
For futures traders, we advise setting up bull-call spreads and long swap agreements to prepare for a multi-year supply squeeze. As China quietly aims to match U.S. reserves, the physical gold market is bound to face persistent deficits that will drive futures prices higher. Positioning ourselves now will ensure we are on the right side of this massive, historic shift in global financial power.
