China is moving to host foreign central banks’ gold. This challenges London’s dominance and strengthens Beijing’s push to reduce reliance on the dollar, while cementing its ability to project global pricing power. Bloomberg reports the People’s Bank of China, through the Shanghai Gold Exchange International, is courting nations to buy and store bullion in China. Spot gold hit a record thirty-seven eighty-four on that news.
Here’s what it really means. First, London is not where central banks actually keep their gold. Most of it is held domestically. The reason London matters is because the BIS uses it as the hub for leasing and hedging. If countries begin placing their reserves in China—or more likely in the SGEI global vault network—that weakens the European supply pool available for leasing.
