China reduces its exposure to U.S. bonds and accelerates gold accumulation

Source: CritpoTendencia Original Title: China reduces its exposure to U.S. bonds and accelerates gold accumulation Original Link: China is executing a quiet but structural move in its reserve composition. New data shows that Chinese holdings of U.S. Treasury bonds have fallen to approximately $680 billion, the lowest in 18 years, while its gold reserves reach record highs close to 74 million ounces.

China is rapidly reducing its U.S. Treasury bonds and accumulating gold. New data shows that China’s holdings of U.S. Treasury bonds have fallen to approximately $680 billion, the lowest in 18 years, while gold reserves have surged to record levels near 74 million ounces. Something big is happening.

This data is not isolated or recent. It is part of a trend that has been developing for over a decade, but in the current context, it takes on a different interpretation: persistent geopolitical tensions, financial sanctions as a political tool, and an increasingly fragmented monetary system.

Less Treasuries, less dependence

For years, China was one of the largest creditors of the United States. However, since 2014, its Treasury holdings have shown a nearly constant downward trend. The drop to $680 billion is not due to a specific event but reflects a gradual strategy of reducing exposure to the U.S. dollar as the dominant reserve asset.

This adjustment does not imply an abrupt exit or a collapse of the U.S. debt market. It reflects a pursuit of greater financial autonomy, especially in an environment where dollar-denominated assets could be exposed to external political decisions.

Gold as a strategic asset

Meanwhile, gold is once again taking a central role in China’s reserve architecture. The latest figures place reserves around 74 million ounces, record levels according to IMF data and Bloomberg compilations.

Unlike sovereign bonds, gold has no counterparty risk, cannot be frozen, and maintains its value as a neutral reserve in high-uncertainty scenarios. For a country seeking to reduce external vulnerabilities, its accumulation functions more as a geopolitical insurance than a speculative bet.

A signal of the new financial order

The chart comparing the decline in Treasury holdings with the increase in gold shows a clear divergence. It’s not just China. This is a dynamic also observed, on a different scale, in other emerging market central banks.

The key takeaway is not that the dollar is finished, but that its hegemony is no longer unquestionable. The global financial system is moving toward greater fragmentation, with more diversified reserves and less dependence on a single monetary power center.

What markets should watch

For investors, this movement is not an immediate sign of crisis but a structural indicator. Changes in reserve composition often anticipate deeper transformations in capital flows, monetary policy, and safe-haven assets.

When central banks adjust their behavior, markets tend to react late. And when data stops being noise and becomes a trend, there are no more headlines to surprise.