As geopolitical rifts deepen and the global monetary order shifts, gold is quietly reasserting its power. Alok Jain, Founder of Weekend Investing, spotlighted this shift, noting, “China is encouraging citizens to hold more gold.”
His post on X (formally Twitter) underscored Beijing’s coordinated moves: from boosting retail gold demand and expanding trade in gold to setting up regional gold exchanges in China and the Middle East. “They know gold has a future,” Jain wrote, contrasting China’s encouragement with India’s restrictive stance on gold loans and high import duties.
While the recent Geneva trade agreement signaled a thaw in US-China tensions, Beijing is pursuing a deeper strategy: weakening the dollar’s dominance by anchoring its financial system in gold and the yuan.
In March 2025, this strategy took a pivotal turn. The China Banking and Insurance Regulatory Commission (CBIRC) issued Directive No. 2025-03, mandating insurance firms to allocate at least 1% of their assets — out of an estimated ¥32 trillion ($4.5+ trillion) — into physical gold. This move could channel hundreds of billions into gold markets.
To facilitate this shift, the Shanghai Futures Exchange (SHFE) was opened to insurers for direct gold purchases, bypassing global markets. SHFE confirmed this is the first time insurers have received such access.
This follows a retail push in early 2024, when the People’s Bank of China encouraged citizens to buy physical gold. The result: a 34% spike in Chinese gold consumption year-over-year.
China’s gold pivot is decades in the making. Since 2000, it has expanded official reserves from 395 tonnes to over 2,200 tonnes. Analysts, however, suspect actual holdings exceed 5,000 tonnes, acquired through opaque channels to avoid spooking markets.
Meanwhile, in India, gold remains culturally entrenched. Indian households, especially women, hold over 25,000 tonnes — primarily in jewellery, seen as both inheritance and financial security. Despite this, government policies remain restrictive, unlike China’s coordinated gold strategy.
