China Just Made Its Biggest Gold Buy in 3 Years. Why Now?

China continues buying physical gold while American consumers increasingly expect higher inflation.

In Episode 313 of The Secret War on Cash, Dean Heskin and Chris Agelastos of Swiss America Trading connect those two developments.

The episode begins with China’s latest gold purchase. The article discussed by Dean and Chris reports that the People’s Bank of China added 23 tonnes in September, its biggest monthly purchase in nearly three years, extending a buying streak that has now reached 23 consecutive months.

Dean and Chris view that behavior as part of a longer strategy of reserve diversification and reduced reliance on dollar-denominated assets.

The hosts also discuss gold’s growing share of global reserves and argue that China still has considerable room to increase the percentage of its own reserves held in gold.

Then comes the U.S. consumer.

The New York Federal Reserve’s latest Survey of Consumer Expectations found the median one-year inflation outlook rising to 3.9%, the highest level since May 2023. Expected household spending growth increased to 5.5%. Longer-term expectations remained lower, with the three-year outlook at 3.3% and the five-year measure at 3%.

Chris focuses on the danger created when wages fail to keep pace with living costs.

If households eventually cannot cover necessities and debt obligations at the same time, missed credit-card and loan payments can ripple outward through lenders and the broader financial system.

Dean argues that official inflation statistics can also feel disconnected from what families actually experience when buying food, paying utility bills or covering medical expenses.

The central question is straightforward:

If governments and central banks are accumulating tangible reserves while ordinary households increasingly expect prices to rise, what does that signal about the value of diversification?