Gold Soars to Fresh Records, China Reportedly Wants to Serve as Custodian for Central Banks

China Pushes to Store Foreign Central Bank Gold as Prices Surge – 27/9/2025

China is reportedly courting foreign central banks to store bullion in Shanghai as gold hovers near record highs, part of Beijing’s broader effort to strengthen its influence in global markets.

According to Bloomberg, the People’s Bank of China has approached central banks in friendly countries via the Shanghai Gold Exchange, with at least one Southeast Asian nation reportedly showing interest. The plan aims to position China as a major bullion hub while reducing dependence on Western financial centers. Custodian services are central to this strategy, helping attract trading activity and boost credibility.

Gold analyst Jan Nieuwenhuijs noted on X that foreign central banks have technically been able to store gold in Shanghai since 2014, though adoption has been limited. One Southeast Asian country, possibly linked to the mBridge cross-border payments project, is evaluating the option.

The push coincides with strong central bank demand driving gold’s rally. Spot gold reached $3,784.74 an ounce in New York on Monday before easing slightly. MarketWatch reported that 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.

Analysts expect gold’s momentum to continue despite overbought conditions. Chris Mancini, co-portfolio manager at Gabelli Funds, said investors are increasingly turning to gold as a hedge against inflation and an alternative to U.S. Treasuries.

China, however, faces competition from established bullion 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, though its domestic market for jewelry, bars, and coins remains the world’s largest.