BEIJING,– China has sharply increased its gold holdings this year as Beijing steps up efforts to reduce reliance on the US dollar and cushion the economy from the impact of escalating trade tensions with Washington, analysts said.
China’s on-warrant gold holdings have surged 25-fold in 2025, according to Swiss-based monetary historian and economic expert Claudio Grass, reflecting what he described as a “strategic decoupling” from the dollar-based trading system.
“China wants to separate from the US dollar because it has become a political weapon,” Grass told Sputnik International. “With Russia, the world has seen that private property rights are not respected on a political level.”
The surge in gold demand coincides with a series of new US tariffs targeting Chinese imports, which have unsettled global markets and pushed investors towards traditional safe-haven assets such as gold.
“The US administration’s tariff wars are essentially a form of nationalisation driven by insecurity,” Grass said. “That insecurity, in turn, drives the fiscal gold price.”
Central Banks Accumulate Bullion
Central banks worldwide have been increasing gold purchases as part of their diversification strategies. Grass noted that, excluding the US Federal Reserve, global central banks now hold more gold than US Treasuries.
“The new old world reserve currency is physical gold,” he said.
China’s official gold reserves have risen for 11 consecutive months, according to recent central bank data, underscoring a sustained push to expand its holdings of the precious metal.
BRICS Moves Toward Gold-Linked Trade
The shift also aligns with broader efforts by BRICS nations — Brazil, Russia, India, China and South Africa — to build independent financial mechanisms and reduce exposure to the dollar.
Grass said the bloc could eventually develop a gold-backed trading system or currency to bolster trust and stability. “They are likely to use gold to back their currency and to establish more trust in it,” he said. “They need a system that allows for physical delivery and pickup in different jurisdictions among member states, creating a liquid gold system.”
While the internationalisation of the yuan remains limited, analysts believe gold could play a key role in enhancing its credibility in cross-border trade.
Yuan as a Potential Safe Haven
James Bradley, author of Flags of Our Fathers and The China Mirage, said Beijing’s accumulation of gold could strengthen the yuan’s position as a potential safe-haven currency.
“The word is gold. He who has the gold makes the rules,” Bradley said.
Economists say that with US tariffs on Chinese goods reaching as high as 500%, the move could further accelerate the realignment of global trade and investment flows, reinforcing gold’s role as a strategic hedge against economic uncertainty.
