China is playing a key role in the ongoing rise in gold prices. (Source: Getty)
For most of recorded human history, gold has been at the centre of our economic systems. From the Aureus – the golden coinage of the Roman Empire – to the great golden treasures of the new world which would help power Spain’s rise to become the world’s first superpower, gold and who holds it, has defined the course of events.
Central banks, and most notably China, have been boosting their stores of the precious metal in the past year or so.
Now in October 2025, as lines to purchase physical gold stretch down the block in some of the nation’s cities, many have been left wondering asking some big questions.
What is China up to? And is gold sending a signal that may define events in the months ahead?
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(Source: MacroTrends)
Despite gold holding the collective imagination of investors today, it hasn’t always been like this.
In 1997, the Reserve Bank acting on orders from then Treasurer Peter Costello sold the vast majority of Australia’s gold reserves, with over 165 tons of gold being sold on the open market.
In this, Australia was not alone, in recent decades Britain and Canada both sold off a majority of their gold reserves.
In short, not too long-ago in the grand scheme of things, gold was seen by many in the world of economics and finance as superfluous, a relic of a bygone era.
As the world turned away from gold following its peak in September 1980, prices would remain depressed below this peak level for over 26 years.
In inflation adjusted terms, the recovery was only completed in October last year, a wait of a little over 44 years.
(Source: MacroTrends)
When Western governments and central banks froze roughly half a trillion dollars’ worth of Russian reserve assets in 2022, following Moscow’s invasion of Ukraine, it sent shockwaves throughout the world.
In the words of author and financial market veteran Simon Ree:
“Beijing learned an important lesson: gold can’t be sanctioned…and can offer a firewall against dollar weaponisation.”
This was a lesson that China and others acted upon quite swiftly.
In the 2019 calendar year, the world’s central banks and other institutions purchased 605 tons of gold in net terms.
By the time of the peak on a rolling 12-month basis in June 2023, net purchases had risen to over 1,300 tons.
(Source: MacroTrends)
Not long after, the price of gold would begin it’s steady and then meteoric rise, from $2,518 ($1,632 USD) in October 2023 to $6,297 ($4,082 USD) this week.
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