China’s Hidden Gold Grab and Silver’s New Strategic Era
- Gold and silver finished the week higher overall, even after a late-week pullback triggered by hawkish Fed comments — a reminder that volatility rides shotgun in bull markets.
- Spot silver price closed at $50.50 and gold price at $4,082.50, while silver futures briefly smashed new all-time nominal highs, and gold topped $4,200 again before cooling off.
- The gold–silver ratio remains unusually elevated at 80, far above long-term norms — historically the sort of imbalance that eventually wants correcting.
- Gold’s recent 11% drop looked more like a breather than a trend change, coming after a parabolic 30% surge fueled by major institutions boosting gold allocations.
- Inflation worries remain sticky, and with policy proposals that inject more currency into the system, the macro backdrop still favors hard assets over paper promises.
- China’s real gold buying may be 10× higher than reported, with estimates suggesting ~1,300 tons purchased annually — a quiet accumulation that speaks volumes.
- Global central banks may also be under-reporting gold reserves, signaling strong sovereign demand at a time of growing distrust in fiat stability.
- Silver is increasingly recognized as a critical mineral in the U.S., pointing to future government stockpiling and stronger industrial demand from energy tech, AI, and electronics.
- Massive silver deficits persist, with an estimated –1.347 billion ounces drained since 2019 as industrial users, bullion buyers, and ETFs outpace global supply.
- While the West sells paper ounces, China keeps buying physical, particularly through its 20 unsecured silver ETFs — a sign of where the smart money sees long-term value.
As China quietly outpaces reported gold purchases and central banks deepen their reserve shift, silver’s emergence as a critical mineral signals a historic realignment in global monetary power.
Precious metals continue to confirm their incredible year of price performance, with gold and silver rallying this week amid expectations of Federal Reserve liquidity and inflation.
Silver futures briefly reached a new nominal all-time high of $54.39 per ounce on Thursday and gold surpassed $4,200 oz for the first time since last month.
Hawkish Federal Reserve comments on Friday triggered a reversal to close the week.
The fundamental drivers for the precious metals remain sound, and we are about to run though some of the most important related data and news on the week.
We now have mainstream financial media like London's Financial Times publicly admitting that China may be buying as much as 10 times more gold than is being reported.
As well acknowledging that government central banks are likely doing similar under declarations in their Official Gold Reserve buying.
Plenum Research a Beijing consultancy was cited in this article back linked in the show notes, that in 2023 and 2022, China was estimated to have made six times the official gold buying reported to the tune of nearly 1300 tons each year going to Chinese gold reserves.
Of course, we all know the official gold reserves China's SAFE declares are a mere a fraction of what it likely owns off balance sheets. Being the world's number one miner of gold during the last near 15 years has likely also helped China amass more gold than we should venture to guess.
In time, perhaps China will come clean to an Official Gold Reserve holding the size of the collective EU, the current USA claim, or perhaps even higher.
Judging by the sheer amount of fiat Chinese yuan sloshing around the Chinese economy, she will need much higher gold prices and Official Gold Reserves to establish currency credibility.
The latest data shows China has more broad fiat yuan currency supply issued than the USA and EU combined.
If we take the last major Western World Gold Bull Market Mania phase from early 1980 into account versus where gold values stand today versus outstanding fiat currencies issued worldwide. Gold still stands to make multiples in price highs to come in order to repeat what occurred just over 45 years ago.
Stick around, on the other side of this break we will examine how much the eastern world, specifically China has been buying this latest gold price dip while the western world has been selling off unsecured ETF and COMEX tonnage of late.
As well, more context of just how tight the world's silver market remains, and what silver as critical mineral is likely to make supplies tighter moving forward.
The spot silver and gold markets were up overall on the week, with a slight selloff to end trading today.
The spot silver price closed at $50.50 oz bid and the spot gold price ended at $4,082.50 oz bid price.
The spot gold-silver ratio ended the week at a still historically high level of 80.
This long running gold silver ratio chart provided by Tavi Costa using annualized price data puts into perspective how high we still are on a historical basis. Sitting currently at about 2.5 standard deviations above the historical average just below 30.
Coincidentally near the spot gold silver ratio low level hit in the spring of 2011 during silver's last much tinier less fundamentally driven bull run.
With silver's recent pop in price, new nominal record price highs are beginning to be hit again around the world calling further attention and headlines.
Transparent silver warehouse levels in China continue collapsing now down to a combined 46.5 million ounces of silver inventories between the SGE & SHFE for the world's largest industrial silver user. This begs the question when will China stop bailing out London
The following clip by commodity culture highlights Dr. Mark Thornton's recent thoughts on silver being declared critical in the USA.
India literally had to press pause on many unsecured Silver ETF capital inflows given the recent silver shortages the world recently witnessed.
If we use estimates by the Silver Institute considering the combined industrial, bullion, and unsecured Silver ETF demand since 2019.
The world has a running deficit of an estimated -1.347 billion oz through the end of this year 2025.
These last seven years of seemingly insatiable silver demand the world over is partly why London etc., keep running into shortages with silver. So deeming silver a critical mineral and raising its profile is a must for nations concerned about their economic standings moving ahead.
The fact that in this recent price consolidation for gold, the west has sold off so much tonnage while China's combined 20 unsecured ETFs have been the major net buyer should tell us all something.
The west is still confused what game were apparently all playing, in terms of bullion versus all other goods, services, and asset class values to come.
REFERENCES:
What’s Behind the Gold Vibe Shift? | Presented by CME Group
https://youtu.be/ESJct6nPgYA?si=uSIFVf0FGld3z_CU
CHINA’S unreported gold purchases could be more than 10Xs its official figures
https://www.businesstimes.com.sg/international/global/chinas-secretive-gold-purchases-help-fuel-record-rally
Dr. Mark Thornton on silver being declared critical in the USA:
https://x.com/jessebday/status/1989431046040092789
