The move is part of a broader effort by the Chinese government to diversify its foreign reserves and reduce its reliance on the US dollar. As the US-China trade war continues to escalate, China has been exploring ways to reduce its exposure to the US dollar and increase its use of other currencies, such as the yuan.
By mobilising citizens' gold, China aims to increase its gold reserves without having to purchase large amounts of gold on the international market. This will allow the country to reduce its reliance on the US dollar and strengthen its position as a global economic power.
However, the move has sparked concerns among some investors about the potential impact on global gold prices. If China were to sell a large amount of gold on the international market, it could potentially cause a drop in gold prices.
Despite these concerns, many analysts believe that China's move to mobilise citizens' gold will have a positive impact on the country's economy in the long run. By increasing its gold reserves, China will have greater flexibility in managing its currency and economic policies, which could ultimately lead to greater economic stability and growth.
It is important to note that while China is mobilising citizens' gold, it is not nationalising it. Citizens will still own their gold, but they will be encouraged to deposit it into authorised financial institutions in exchange for interest payments.
Overall, China's move to mobilise citizens' gold is part of a larger effort to diversify its foreign reserves and reduce its reliance on the US dollar. While there are concerns about the potential impact on global gold prices, many analysts believe that the move will ultimately benefit China's economy in the long run.