Is China hoarding gold so yuan becomes global reserve instead of USD?

For nearly a century, the US dollar has ruled the global financial system. Buy a couple of million barrels of oil, or a few million tonnes of wheat, and there’s a good chance that the US greenback will be part of that trade. 

China wants that to change. 

Since the 2000s, China has been pursuing a sweeping campaign to upend the status quo and put its own currency, the Chinese yuan, at the center of international trade, likely at the US dollar’s expense. 

Chinese President Xi Jinping hinted at this again in a speech published in the Qiushi magazine (a Chinese state publication) last month, saying the country needed to build “a strong currency, which is widely used in international trade and foreign exchange markets, and has the status of a global reserve currency.” 

Should the Chinese renminbi (the official name, meaning “people’s currency”) upend the US dollar — and some say it could happen around 2050 — it would mark the biggest shift in global power since the Second World War. 

How would it achieve this? Some analysts speculate China is secretly hoarding gold — far more than it’s disclosing — and will eventually do a big reveal, creating a new global monetary system backed by gold and represented by the Chinese yuan. 

While there has been speculation about a gold-backed BRICS currency, getting agreement and implementing a shared currency among more than 10 nations is unlikely in the near term. A unilateral effort seems much more likely.

“I think it’s the biggest story in world finance — China’s accumulation of gold — and nobody is looking at it,” financial writer Dominic Frisby said during an appearance on the Triggernometry podcast. 

Frisby has written four books on the history of taxation and on gold and Bitcoin, and has been a contributor to MoneyWeek since 2006. 

At the end of 2025, Beijing claimed it had only 2,306 tonnes of gold in its reserves, ranking it sixth among nation-state holders of gold, behind Russia, France, Italy, Germany and the US. 

But some estimate China already holds more than double that amount, based on how much gold it mines and imports each year. Bloomberg reported in January that China has bought more gold every month for the past 14 months, despite prices reaching record highs. It then bought more gold in January.

Jan Nieuwenhuijs, a gold analyst at Money Metals Exchange, estimates that China holds 5,411 tonnes, more than double its reported figure. 

He tells Magazine that China has been buying quietly to avoid driving up prices (although the recent surge in gold prices suggests that effort has been in vain).

“Covert buying allows the PBoC to buy more gold at lower prices — getting more bang for their buck,” he says.

“What makes this strategy effective is its subtlety,” says Charles-Henry Monchau, chief investment officer of the Syz Group, a Swiss banking group, as China looks to shed the world’s reliance on the US dollar over time. 

“Unlike dumping Treasuries, which could trigger market panic and backfire economically, buying gold is a quiet, cumulative tactic. It exerts downward pressure on the dollar over time, especially if other nations follow suit. 

“By transforming some of its surplus dollars into gold, China reduces global demand for the greenback while building a monetary buffer that reflects real value.”

Frisby estimated that China likely has three times as much gold as it is letting on (and could have as much as 10 times), which would enable it to attack the USD when the time is right.

“But if they ever go into conflict, you can be sure China will use money as a weapon of war just as America does.”

There’s lots of circumstantial evidence for the theory, but given the lack of transparency in China, it remains hard to prove conclusively.

“Money illusion” is all about gold

To understand how China could undermine the USD with a gold-backed currency, one first needs to understand how the US dollar became the dominant world reserve currency over the last 82 years. 

Towards the end of the Second World War, 44 allied nations signed the 1944 Bretton Woods agreement, which pegged global currencies to the US dollar at fixed rates, with the dollar itself convertible at a fixed rate of $35 per ounce.

The US dollar was interchangeable with gold at Fort Knox, and thus “as good as gold.” Countries would use the US dollar to represent gold in international trade, while the US would settle its international obligations in gold under a stable, fixed exchange-rate system. 

However, the system came crashing down a few decades later, as the US started printing more dollars than the gold it had to fund its war in Vietnam. 

Facing a potential run on gold, former US President Richard Nixon ended the direct convertibility of the US dollar into gold, effectively ending the attempt at a “gold standard.”

Luckily, the US was still the world’s largest economy and probably still had quite a lot of gold in its vaults, leaving people with no choice but to continue putting their faith in the US dollar despite it no longer being pegged directly to gold.

“It’s called money illusion,” said Frisby. “Even if there’s nothing backing the money. We have to think there is something backing the money for it to work.”

The US claims to hold 8,133 tonnes of gold, more than half of which is supposedly held in Fort Knox. However, there hasn’t been a comprehensive audit for decades.

Frisby argued that: “if at the same time China comes along and says, you know, we have five times as much gold as we said we did. Then suddenly, China has a real, tangible backing to its money just as America has now.”

Frisby’s initial estimates suggested China could hold as much as 16,000 tonnes of gold in its central bank — which would be double the US’s reserves — but later revised the estimate to around 7,000 tonnes. 

So the big question is, how much gold does China really have?

Analysts say China’s gold stash could be 2x official figures

Last year, a Chinese policy specialist told Reuters that China’s reported reserves were far lower than what would be expected for the world’s second-largest economy.

China’s economy, measured by gross domestic product (GDP), is estimated to reach 20.7 trillion in 2026, according to the International Monetary Fund. US GDP is expected to reach 31.8 trillion.

Using the same ratio, China’s gold reserves would be about 65% of the US’s 8,133 tonnes, putting them at about 5,300 tonnes of gold, double its reported amount. 

Analysts at Australia’s ANZ Bank have reportedly estimated a similar figure of 5,500 tonnes, placing it second among nation-states. 

These estimates could potentially be revised upwards when one realizes that China has been the world’s largest producer of gold since 2007. 

Since 2013, China has produced around 4,811 tonnes of gold, adding 380 tonnes in 2024 (equivalent to 10% of total global production), with more than half of its domestic gold mines state-owned, according to Frisby’s blog The Flying Frisby. 

China is also one of the world’s largest importers of gold, importing approximately 1,225 tonnes in 2024, with major sources including Switzerland, Canada and Australia, with more routed through Hong Kong.

At the same time, since 2015, withdrawals from the Shanghai Gold Exchange, which is where non-official gold purchases flow through, have averaged around 1,800 tonnes per year. 

Frisby estimates that the Chinese government has 7,294 tonnes of gold.

His math is that the SGE has seen around 23,250 tonnes of gold since 2007; another 2,500 tonnes exist as undisclosed gold bars in London; and another 4,000 tonnes come from domestic mining and privately held jewellery, with about 23% of all this gold belonging to the central bank. 

Why China is hush about its gold reserves

Analysts believe China is intentionally keeping the lid on the true state of its gold reserves, as revealing it too early could hamper its strategy. 

Nieuwenhuijs believes the Chinese central bank is waiting until it can comfortably shed its reliance on the US dollar before revealing its true gold reserves — though he doesn’t see it as much of an attack on the US, rather than a declaration of independence. 

The latest figures show China’s foreign exchange reserves are 3.4 trillion as of December 2025. 

Jeff Currie, chief strategy officer of energy pathways at fund manager Carlyle, appears to agree, telling the Financial Times that “China is buying gold as part of a de-dollarization strategy.”

Another scenario might see China do a big reveal as a Hail Mary if trust in the renminbi declines, says Nieuwenhuijs.

“The PBoC’s gold reserves can support the renminbi (provide trust) and ultimately back it ‘one on one’ [with] gold.”

Time to buy Bitcoin, gold and silver?

Rich Dad, Poor Dad author Robert Kiyosaki, Frisby and many other market observers have urged their followers to buy as much gold and Bitcoin as possible (Kiyosaki now also recommends Ethereum due to inflated prices of the other two). 

“For years, I have been urging everyone to accumulate gold and Bitcoin… They are two proven non-government forms of money,” said Frisby. “I can’t help but think they both have a very important role to play in the future.”

Gold has seen record prices recently, with many analysts linking them to the “debasement trade” — where investors pile into assets they perceive as hedging against high government debt and geopolitical uncertainty. 

Bitcoin has been having a tougher year, trading at $68,423 at the time of writing, down by one-third from a year ago, though it’s still up 16,500% from 2016. 

“It’s why I recommend both gold and Bitcoin,” Frisby wrote.