China’s secretive gold purchases help fuel record rally

CHINA’S unreported gold purchases could be more than 10 times its official figures, as the country quietly tries to diversify away from the US dollar, say analysts, highlighting the increasingly opaque sources of demand behind bullion’s record-breaking rally.

Publicly reported buying by China’s central bank has been so low this year – 1.9 tonnes purchased in August, 1.9 tonnes in July and 2.2 tonnes in June – that few in the market believe the official figures.

Analysts at Societe Generale estimate based on trade data that China’s total purchases could reach as much as 250 tonnes this year, or more than a third of total global central bank demand.