China has yet to show its hand

Housekeeping: Good afternoon. Here is an analysis and risk assessment of China’s stoppage on public gold purchases. Transcript attached.

TL; DR

• The halt in gold purchases is possibly/likely a part of China’s multifaceted strategy to support the digital yuan, manage market prices, and prepare for a multipolar world economy.

• China's actions include buying gold, creating trade zones, and signaling commitment to its BRICS partners.

• The strategy involves leveraging gold to support the yuan, gaining international trust, and reducing dependency on the dollar.

Contents

1. Bottom Line

2. Background

3. Potential Reasons for Halting Gold Purchases

4. Implications and Broader Context

5. Conclusion

6. Appendix:

   1. Charts used

   2. Brics Marching Orders Notes

   3. Links

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1- Bottom Line:

China has been publicly purchasing gold for the PBOC for 18 months, signaling strong nationalistic support for gold over dollars. The sudden cessation prompts analysis of potential reasons and implications. We explore those with supporting information observed

2- Background:

Over the past 15 years, China’s strategy has evolved significantly. Initially, China was more opaque in its gold purchasing habits. However, more recent transparency has aligned with broader strategic goals, including building trust with BRICS partners and demonstrating a commitment to moving away from dollar dependence.