China's secret gold buying in 2026 flags reserve shift, Goldman says

Goldman Sachs identified unreported gold buying by China's central bank, the latest sign of reserve diversification away from US dollars.

Goldman Sachs identified unreported large-scale gold accumulation by China's central bank, a move that could reshape global reserve dynamics.

Goldman Sachs published its analysis on July 27, identifying the unreported accumulation through cross-referencing trade data, vault records, and PBOC disclosures, according to the report. The investment bank's commodities research team flagged discrepancies between China's officially reported gold reserves and observable flows into the country, suggesting the central bank has been buying through offshore channels to avoid market detection.

The People's Bank of China has expanded its gold holdings beyond officially reported levels, the analysis found. The buying comes as Beijing seeks to reduce its reliance on the US dollar in international trade and reserves, a strategy that has accelerated since US sanctions on Russia in 2022. China holds the world's largest foreign exchange reserves and has been a consistent gold buyer in recent years, though the scale of its purchases has been difficult to track through official channels alone.

The undisclosed accumulation points to potential de-dollarization and reserve diversification on a massive scale, the report said. This could drive a significant rally in COMEX gold prices globally as markets reprice supply and demand dynamics. Other central banks may follow China's lead, compounding upward price pressure on bullion. The shift also risks adding geopolitical tension between the US and China as dollar hegemony faces its most serious challenge in decades.

Central Bank Demand Reshapes Gold Market

China's gold buying is part of a broader trend among central banks to diversify reserves away from the US dollar. The PBOC's undisclosed purchases suggest the pace of this shift is faster than previously understood by markets. If other central banks follow China's strategy, the additional demand could push gold prices higher over the medium term, the report said.

The implications extend beyond gold markets to currency markets, sovereign bond yields, and the broader architecture of the global financial system. A sustained shift away from dollar-denominated reserves could reduce demand for US Treasury securities, potentially pushing yields higher. For gold markets, the structural demand from central banks represents a price floor that did not exist in previous cycles. The LBMA gold price has already benefited from sustained central bank buying in recent years, and the PBOC's undisclosed accumulation adds a new dimension to that demand picture.

The next catalyst for gold markets will be the PBOC's official reserve data release, which may provide further confirmation of the buying trend. Investors and analysts will also watch for signs that other major central banks, particularly those in emerging markets, are increasing their gold allocations in response to China's strategy.

This article is for informational purposes only and does not constitute investment advice.