China has been boosting its gold bullion reserves, while selling US Treasury debt, according to a report on Baijiahao.
Amid the growing de-dollarization trend and increased awareness of the importance of diversification of foreign exchange reserves, starting in 2022, China began to sell US Treasury debt and use the dollars to stock up on gold.
China’s Central Bank has been accumulating gold reserves, with the Asian powerhouse boasting official gold holdings of 66.76 million ounces – an increase of 260,000 ounces from the previous month.
Official figures show that previously, between September 2019 and October 2022, China’s gold reserves remained unchanged, and only November 2022 saw Beijing start bulking up on the precious metal.
Gold has become a safe haven and go-to choice for investors, with spot gold up 0.3% at $2,045.79 per ounce on May 4, just $27 below the all-time high of $2,079.67 per ounce.
Other countries besides China have also embraced the gold frenzy, with data from the World Gold Council revealing that in the first quarter of 2023, global central banks increased their gold holdings by a total of 228 tons.
The People’s Republic of China (PRC) has been accumulating gold by selling off US Treasuries amid higher dollar interest rates and a volatile international environment, using the greenbacks to invest in the precious metal.
US Treasury Department data released in March showed that China’s holdings of Treasury debt had dropped to $859.4 billion in January 2023, declining for the sixth straight month.
The trends cited in the report are all part-and-parcel of the drive to cut dependence on the US dollar and switch to national means of payment in international settlements.
This trend is gaining steam across the globe, as Washington has abused the dollar’s hegemony, the media report underscored.
Amid the self-inflicted damage from the sweeping anti-Russian sanctions that the West has cobbled together, the freezing of its Central Bank reserves, severing it from SWIFT, along with restrictions imposed on China’s industries, many countries have become leery of relying on the greenback.
The US banking crisis earlier in the year amid the Federal Reserve continuing to raise interest rates to curb inflation.
The ongoing bitter standoff in America’s Congress over the debt ceiling, fears of a default with its global repercussions – all of this has prompted the urgency of shedding US government bonds, too.
Against the backdrop of the chaotic situation with the US economy, only gold can be relied upon to grow in price, said the authors of the report on the Baidu-launched blog-style platform.
The global trend of de-dollarization is also paving the way for the boosted international standing of China’s own currency – the yuan.
Moscow has adopted the yuan as a reserve currency, while pledging to use the Chinese means of payment between Russia and countries of Asia, Africa, and Latin America.
China and Brazil recently struck an agreement to carry out trade and financial transactions directly, exchanging yuan for reals.
Meanwhile, more and more countries, especially in the Global South, are mulling doing the same. China uses mutual settlements in national currencies with more than 30 countries of the world.
According to official data cited by Chinese media outlets, the country’s yuan has become the world’s fifth-largest payment currency, third-largest currency in trade settlement, and fifth-largest reserve currency.
Amid the clamor for using alternatives to the dollar in global trading, BRICS member states will debate introducing a common currency, South Africa’s minister of international relations and cooperation recently stated.
BRICS nations – Brazil, Russia, India, China, and South Africa – are set to meet for a summit on August 22 in Johannesburg, South Africa.
The bloc has long been working on measures to reduce the share of the dollar in mutual payments, and the possibility of a single currency emerging in BRICS is not being ruled out by officials and analysts.
Sputnik / ABC Flash Point News 2023.
Karma @ work, what you saw is what you reap?
America is going to great lengths to be hated worldwide exactly the same as Rome ended up being hated as its strength diminished –yes D FENS Karma really works !