China Looks to Host Foreign Central Bank Gold as Prices Soar – 27/9/2025
China is reportedly seeking to store foreign central bank gold in Shanghai as bullion prices hover near record highs, signaling Beijing’s effort to expand its influence in global markets.
The People’s Bank of China has pitched the idea to central banks in friendly countries through the Shanghai Gold Exchange, Bloomberg reported, with at least one Southeast Asian nation reportedly expressing interest. The initiative aims to strengthen China’s position as a bullion hub while reducing dependence on Western financial centers. Custodian services are central to this strategy, helping attract more trading activity and bolster market credibility.
Gold analyst Jan Nieuwenhuijs noted on X that foreign central banks have technically been able to store gold in Shanghai since 2014, but adoption has been minimal. One Southeast Asian country, possibly linked to the mBridge cross-border payments project, is evaluating the option.
The proposal comes amid strong central bank demand that has fueled a powerful rally in gold. Spot gold reached $3,784.74 an ounce in New York on Monday before easing slightly. MarketWatch reported gold closed last week at $3,789.80, up 43.6% year-to-date — outperforming Bitcoin’s 17% gain, the S&P 500’s 12.96% rise, and the Nasdaq Composite’s 16.43% increase.
Despite overbought conditions, analysts expect gold’s bullish momentum to continue. Chris Mancini, co-portfolio manager at Gabelli Funds, said investors are increasingly using gold as a hedge against inflation and an alternative to U.S. Treasuries.
However, China faces competition from established markets such as London, whose vaults hold over 5,000 tons of global reserves. The World Gold Council ranks China fifth among central bank gold holders, although its domestic market for jewelry, bars, and coins remains the largest worldwide.
