China Eyes Custodian Role for Central Banks as Gold Continues Surging

China Seeks to Store Foreign Central Bank Gold as Prices Hit Record Highs – 27/9/2025

China is reportedly courting foreign central banks to store bullion in Shanghai as gold hovers near record highs and demand strengthens, signaling Beijing’s push to expand its influence in global markets.

The People’s Bank of China has approached central banks in friendly countries through the Shanghai Gold Exchange in recent months, Bloomberg reported, with at least one Southeast Asian nation showing interest. The move would enhance Beijing’s position as a major bullion hub while reducing reliance on Western financial centers. Custodian services are a key part of this strategy, attracting more trading activity and boosting credibility.

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

The push coincides with a strong rally in gold driven by central bank demand. 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 — well ahead of Bitcoin’s 17% gain, the S&P 500’s 12.96% increase, and the Nasdaq Composite’s 16.43% rise.

Analysts remain bullish despite overbought conditions. Chris Mancini, co-portfolio manager at Gabelli Funds, said investors are increasingly using gold as a hedge against inflation and as an alternative to U.S. Treasuries.

Still, China faces stiff competition from established bullion centers like 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 largest in the world.

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