---
title: 'China Just Shut Down Gold Trading'
source: 'https://youtube.com/watch?v=Z_xvkbGWauU'
video_id: 'Z_xvkbGWauU'
date: 2026-07-01
duration_sec: 1531
---

# China Just Shut Down Gold Trading

> Source: [China Just Shut Down Gold Trading](https://youtube.com/watch?v=Z_xvkbGWauU)

## Summary

China's largest banks are shutting down retail paper gold trading, a move that signals a deeper battle over the true price of gold and the future of the dollar. The official reason is to protect citizens from volatility, but the underlying strategy appears to be an attempt to suppress paper market manipulation and establish China as the global center for physical gold price discovery. This shift, combined with central banks secretly hoarding gold and selling US Treasuries, suggests a fundamental realignment of the global monetary system.

### Key Points

- **China Shuts Down Paper Gold Trading** [00:00] — ICBC and other major Chinese banks are ending retail paper gold trading, effective July 24th, citing volatility protection.
- **Official vs. Unofficial Reasons** [01:03] — Officially, China is protecting citizens from gold's volatility. Unofficially, it may be to end price suppression from paper markets and enable real price discovery.
- **Central Banks Buying Physical Gold** [03:28] — Central banks, especially China, are buying record amounts of physical gold, often undisclosed, while selling US Treasuries.
- **Paper Gold Explained** [04:38] — Paper gold represents claims on physical gold, but far more paper exists than actual metal, suppressing the real price. This is analogous to selling multiple certificates for a single Pokemon card.
- **Evidence of Manipulation: Price Divergence** [08:03] — A disconnect between physical and paper gold prices (e.g., a 40% premium for physical silver) indicates market manipulation.
- **Evidence of Manipulation: Investor Behavior** [11:44] — Central banks are selling paper claims (US Treasuries) and buying physical gold, signaling a loss of trust in the dollar system.
- **China's Long-Term Plan** [17:12] — In 2014, the head of the Shanghai Gold Exchange stated that when China gains a voice, gold's true price will be revealed.
- **China's New Gold Settlement System** [18:05] — China is building a physical gold settlement system in Hong Kong and Shanghai, aiming to set the global gold price outside the dollar system.
- **US Response: Gold-Backed Bonds** [21:02] — The US could revalue its gold (currently at $42/oz) to nearly $1 trillion and issue gold-backed bonds to compete with China's yuan-gold anchor.
- **Speculation on July 4th Revaluation** [23:42] — Some speculate the US might revalue its gold on July 4th, 2026 (250th anniversary) as a monetary declaration of independence, though this is uncertain.

## Transcript

So the battle for what is money and who controls it just got really interesting. At the start of the year, some investors apparently made a bet that gold could be worth as much as $20,000 per ounce by the end of the year. Now today gold is worth closer to $4,000, but what's
interesting is that on June 24th, one of China's biggest banks, the industrial commercial bank of China or the ICBC announced that they were shutting down their paper gold trading for their retail investors.
What does that mean? That means on July 24th, if you're a Chinese citizen who wants to trade gold through their bank, your access will get switched off. Now the ICBC is not the only bank doing this.
It was also their postal savings bank of China that did it first, then Ping'an Bank, then China Guangfang Bank announced it in June. So some of their biggest financial institutions, one after another, are now pulling the plug on retail trading. The question is, why is China doing this?
The official story that they're telling us is that they are protecting citizens from the volatility, right, the extreme up and down movements of gold. They're doing this because back in January 29th,
spot gold hit an all-time high over $5,000,000 per ounce, but then it crashed. As I'm making this video, gold is trading at around $4,000 per ounce. That's a drop of about 28% from the peak.
So of course to protect people, China's banks have increased what's called the margin requirement to 140%, which is a record high for the industry. A margin requirement, by the way, is the amount
of collateral someone needs to borrow money. And by increasing that percentage, like they just did, it means you need to have a lot more money to borrow less money. China is now demanding more
collateral than what the investment is even worth. Okay, so the official reason is gold is volatile, retail traders are getting hurt, and big government has to step in to protect them. Now,
the unofficial story, though, is probably what's actually happening, which is the battle for real money and what that money should be worth. Right, think about what China is really shutting down.
They are getting rid of margin trading. They're getting rid of the leveraged deferred contracts, the paper gold. Basically, the easiest way to understand it is they are getting rid of the speculation,
the gambling, but physical gold, that's all good. They could still buy and sell that. They're not stopping people from owning gold. They are stopping people from trading the paper claims against gold.
Okay, so why is China doing that? The theory says it's because the real price of gold should be way higher than it actually is. But the reason that it's not is because it's being manipulated and
suppressed by the paper markets. And it has been for decades. So in order to have what's called real price discovery, in other words, in order to figure out what something is really worth,
you need to first shut down people's ability to gamble on the price of it. Now, if this were true, we'd probably see China as a nation start to buy a lot more gold than usual. And that's exactly
what they've been doing. In May of this year, they bought 163 tons of gold, the most since March 2024. And that's not just true of China. That is true of all central banks around the world, which have
been buying way more gold. In fact, as much as 15 times more than they've been telling us. It makes sense, right? Which is also why the Chinese government is launching a brand new gold
clearing and settlement system. It's a system that's designed to make China, not London or New York, but China as the place where the price of gold actually gets set. Now, once you put all of this
together, central banks and nations secretly buying gold and taking steps to get rid of the paper markets and building the settlement hub there, it all starts to make a lot more sense. So today,
let's speculate on what could be really happening and why China is doing this right now and what it all means for our investments and the dollar. So with that said, let's get into it. Hi, my name is Andre Jik. Hope you're doing well. Come for the finance and stay for the battle of
money and gold. So to understand why China shutting down their paper gold market is such a big deal, you have to first understand what paper gold is and how it works. And the easiest way I can explain it
is like this. Let's say I've got this sick Pokemon card called the Ancient Mew. It's a physical card that is sitting in my safe. It's real. I can hold it. There's only one of it. Now imagine then I
write up a little paper certificate that says this entitles you to one of these mues. And then I sell it to you. You're happy because you've got a claim on my card, but maybe you don't actually want to
custody the card because someone might steal it and you're afraid. So you just hold the certificate. It's easier. It also trades like the real thing, but you never come to collect it from me.
So here's the problem. Once I realize you're never actually going to show up and ask for your card, what stops me from writing a second certificate and then selling it to someone else and then a third
and a fourth and a tenth. Now there's 10 people who think they own this Mew. But there's still only one card. I've sold 10 claims on it though. On paper, the supply will show that there's 10 mues.
In reality, nothing's changed, right? There's still one card in existence. So what's it really worth? Well, if the market is pricing my card based on the evidence it has, which is all that paper floating
around, the price should be one-tenth of what it should be worth because as far as the market can tell, these mues are everywhere, right? Why would the price go up when there's so much of them available?
That's paper supply. Now the second everybody walks in at the same time and says, you know what, Andre? Actually, I want my card now. The whole system would fall apart because nine out of 10 people
would find out that their paper certificate is worth nothing. That is the overly simplified version of paper gold. Now in the big Western markets like London and Comex in New York, most gold that trades
every day is never physically delivered. They're what are called contracts. They are claims. People buy and sell these pieces of paper that represent claims on the gold and the majority of people
never intend to take a single physical bar. Same as the mu example. And just like my card scheme, that means they can also write way more claims than there are actual pieces of metal sitting in their
vaults. Now estimates for how much paper gold there is varies because no one knows how much gold there really is in the world or how much paper there is. But the point is there is dramatically
more paper than there is physical real gold. What that means then is that the price of gold today is probably lower than where it should be. That's how you suppress the price of an asset. Now hold on,
where is my proof? Like I can't just say, we think there's more paper gold there. Trust me, bros. If what I'm saying is true, how would we know? There's a couple of ways that we might know that
that could be true. First, there would be a disconnect between the price of the physical thing and the paper thing. Think about it like this. If the world was 100% honest and this mu only had one paper
claim on it, where the hundred dollars, the card and the claim would trade perfectly one to one because the world knows all the details. But the moment it becomes a casino where no one knows
how many news there are and how many paper claims there are, then what you'd see is a natural price divergence of these assets. People might want to pay more for the physical thing than the paper thing.
They'd be like, I don't know if I trust this system, so I'll happily pay a little premium for the real thing. Now, the tighter the spread between the real and not real, the more honest the market
thinks the game is, the bigger the spread between the two, the more the market thinks something funny might be going on. Makes sense, right? That's one way that we might know. Okay then. So then the question
have we ever had price divergences between the real and the paper thing. And it turns out that we have in the silver markets, for example, the peak hit in January. It was temporary, but it was something
like a 40% price differences between the physical and the paper markets. Now the spread today is much smaller, but it's still not nothing. There is still a premium for physical silver.
Now, the spread in gold is much, much smaller, which means in theory, maybe all is fair, but is it really China wants to know how real is this casino? Let's go and find out what the price
should really be by getting rid of paper speculation. This is one way to tell that something is off. But there is a second way, and it's even better. Now, before we get into that, I've talked about
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to behave. Because think about it. If you knew the paper was maybe fake, and you knew the real price should be higher, what would you actually do? You'd do two things. You'd sell the paper, and you'd
buy the physical thing. You'd get out of the certificate market, and you'd start buying a lot more of the real thing. So the question is, is anybody actually doing that? And the answer is yes,
they are. In fact, the people doing this are the most sophisticated money markets on the whole planet. It's the people that print the paper currencies. It's the central banks. They have been buying physical
gold at the fastest pace in recorded history. In the first quarter of this year alone, central banks bought a net 244 tons of gold. That is the strongest first quarter ever recorded. And it's also
not a one time thing. They've now bought over 200 tons in 10 of the last 11 quarters. And the crazy part is that a big chunk of that buying was never officially reported, which is kind of interesting.
According to the World Gold Council, they say their number includes an estimate of undisclosed purchases, which means gold, these banks are buying, but not telling anyone about it.
Now, this shadow accumulation has allegedly been happening since 2022. The official numbers that banks are reporting, that's just the minimal. The real number is probably way bigger, maybe as much as
10 times bigger, especially for China. Now, that behavior, that's the first half of it. They'd buy more of the real thing. But it's also what they're selling to buy it. What are they selling? That would be
US treasuries, the bond market, because for 50 years, the strategy for all central banks was doing the opposite of this. Central banks took your extra dollars, and they parked them in US treasuries.
They basically lent the money back to America to earn a little bit of interest. That was the safe thing to do, and everybody did it. Any country that didn't do it, in fact, and tried to route around the dollar, got a lot more freedom in their country, right? But now, we're seeing a reversal
of that strategy. Foreign central banks have essentially quit growing their pile of treasuries over a decade ago. And lately, some of the biggest holders have actually been selling US treasuries. China
has dumped hundreds of billions of dollars of US debt and rotated it into gold. Now, they're not dumping all of it at once. That would not be smart, because they want to extract as many dollars as they can.
If they sold all of it at once, they'd crash the value of their own bond holdings, so they have to do it slowly and strategically. That's true for all the other countries holding on treasury bonds as well. But what they're selling, basically, is the paper promise of,
supposedly the most powerful government on earth, and they're doing that to buy gold that pays them zero interest. And on paper, that sounds kind of crazy, because why would anyone trade an asset that pays you for an asset that doesn't? You would only do that if you no longer trusted the promise
of that paper. What was the promise? The promise was, give us your paper, park your money into our assets, we'll be honest, we'll protect you, we'll trade with you, and your life will be awesome,
right? But after the Iran conflict exposed the US, and after decades and decades of the forever war model, which was funded by money, that could be printed to infinity, giving the US unchecked power,
the world sort of had enough, the world does not want dollars, it wants real money, they want what economists call multi polarity, where it's not just one nation that rules the world, but many
nations that contribute. Now with this theory was true, how would we know that it might be true? What would be the evidence? Well first, we'd see those US treasuries being sold off over a long
period of time, and we have been seeing that. We would also be seeing investors selling paper gold, and we have been seeing that, money has flowed out of US gold ETFs, we'd also see gold as an asset
surpassed treasuries as the reserve asset for central banks, we are seeing that. Gold now represents a bigger share than US treasuries. Gold demand in China also hit a record 207 tons, which breaks a
record that stood for over a decade. So combine all this together, how do we know the casino might not be telling us the truth? We might see things like the prices diverging between paper and the physical
markets, we'd see the world selling the paper claims, and we'd see the US export gold, and we are. Gold is going east, and that's because gold is the number one export out of the US for several months in
a row now. Central banks worldwide are dumping the dollars paper and hoarding the real thing, and hiding how much. The question is, is that the evidence of an honest market? This theory says,
no it isn't, this is not what a healthy honest market looks like. But there's another piece of evidence that shows us this theory could be true, and it's because China told us way back in 2014.
Remember when the head of the Shanghai gold exchange stood up and gave a speech at what's called the LBMA, the London Bullion Market Association, which by the way is the western paper gold pricing system. So while he was there, he looked at the gold establishment and he said,
Shanghai gold will change the current situation of consumption in the east, priced in the west. And then he said, when China has the right to speak in the international gold market,
gold's price will be revealed. So basically he's saying once China has a seat at the table, which they obviously now do, that's when the world will finally get to see the reality of the price.
And that was 12 years ago. In 2026, all of this is sort of clicking into place. So then the question is, well, what is China actually doing? What are they building? And what they're building is their own
version of a casino, where they get to say the house can't cheat. And that is why they're shutting down retail paper gold trading. That is why the ICBC construction bank and the rest of them,
that is why they all take effect on the same day on July 24th. This is not a coincidence, because in that same time window, China's also turning on the other half of their plan. Their brand new gold settlement system run out of Hong Kong and working together with the Shanghai
Gold Exchange. Here's how it's going to work. Shanghai is the vault in the price. It's an exchange built on physical delivery. So when metal trades over there, real metal actually will have to move,
which means the price will have to show real supply and demand. Not a mountain of paper claims that people are using to bet against on what the price of gold will be tomorrow. That's real price discovery that we talked about. But because of China's capital controls, the foreign nations can't
easily get in. That's where Hong Kong comes in. Hong Kong is going to be their front door, where Shanghai sets the price based on real discovery. And Hong Kong lets the world trade on it. So you put them together and what you now have is a parallel financial system that's going to be
the alternative to the system in London and New York that's going to be sitting outside the dollar. Now, how do we know how big of a deal this is going to be? What we know is that Hong Kong is growing its physical vault capacity from around 200 tons to over 2000 tons. They're doing a 10x increase.
Obviously, you would not need a vault that big for a paper casino. But if you want to settle in real gold, obviously you'd want as big of a vault as you can build. And the reason why China wants to do all of this
is because they understand that if you control the price of the most trusted money on earth and you settle it in your currency, the you want, then you've given your currency what's called an anchor. Not an official gold standard, but something that ties to it, something that manages people's
expectation of stability. They know the world doesn't fully trust the you on on its own yet because it's controlled by the Chinese government. It's not freely traded. But the world trusts gold.
So if every major commodity deal can be priced in you on and settled against real gold sitting in the Shanghai vault or somewhere close to their trading nation partners, then the countries that
were nervous about holding the you on will have a reason to hold it. Because behind it sits that anchor, the thing that nobody can print that they can then use to fund the forever war model. That is how China challenges the dollar without actually going to war with the US. That is China's move,
which leaves the obvious question. What is the US going to do about it? The theory says that the US will try to recreate a similar idea with gold backed treasury bonds. Now, here's a fact that sounds
made up, but it's actually completely real. The US government owns something like 8,000 tons of gold. Allegedly, we don't know if this is what's called unencumbered gold or if it's still there, but that's what the official numbers say. It could be a lot less could be a lot more. But on the government's books,
that gold is not valued at the market price. It is valued at a price set by law back in 1973 and was never updated since. That price is $42 per ounce. Gold is obviously trading around $4,000 per ounce.
So officially on paper, the United States values all of its gold at about $11 billion. In reality, at today's prices, that gold would be worth closer to a trillion dollars. It's a trillion dollar gap. It's basically hidden by an accounting rule from the Nixon era.
So how the US could fight this is with just the stroke of a pen. The US could just revalue that gold and update the official price from $42 to something closer to the market price.
Now, the moment the US does that, more than a trillion dollars in value would appear on the treasury's books. That's money the government could use without creating or issuing a new bond. In fact,
the Federal Reserve has actually published research on this idea. The Treasury secretaries talked about monetizing the asset side of America's balance sheet. Within the next 12 months, we are going to
monetize the asset side of the US balance sheet for the American people. We are going to put the assets to work. There's also a proposal floating around from an economist named
Judy Shelton for a 50-year treasury bond that you could redeem in either dollars or physical gold. What that would do is it would make the US treasury bond partially backed by gold again,
the exact same trick that China is doing with the you want. That is the West's answer to the East. If China is going to anchor the you want to gold, then the counter is fine, we'll just do the same
for the dollar. That is also why some people out there believe, and this is big speculation here, but that this re-evaluation could happen sometime in July, maybe July 4th. America's 250th birthday,
whether US revalues its gold and launches that gold-backed bond as a monetary declaration of independence. Think if on July 4th, 2026, which is going to be the 250th anniversary of our nation's founding,
Treasury offered for the first time since 1971, when President Nixon closed the gold window and ended any kind of gold convertibility for the dollar, you would be establishing a link between the US dollar
and gold. Now, do I think that it's going to happen on that exact day or happen at all? I don't know, I have no idea. But what I do know is that the Fed is looking into this. The Treasury Secretary has
talked about this. The gold bond proposal is a real idea. And even if the re-evaluation is nonsense, if it doesn't happen with the repricing of gold, it might still happen anyway, but not on the gold side.
But on the devaluation of the dollar side, gold does not have to go up for this to happen. The dollar just has to go down a lot, and that would be the same thing. Luckily, we have a Fed
chairman who's going to show us that inflation is not as bad as we think. Having said that, though, as a disclosure, I personally do not hold any gold at all. I'm waiting for a safer entry
price, and when that happens, I'll let you know on the premium member section, where you'll also get access to my main videos earlier, and if that is valuable, the link is down below. It allows me to make more videos like this one and take on fewer sponsors. Thank you so much for watching this video. I hope you have a wonderful rest of your day. Smash the like button,
subscribe if you haven't already. I'd love to see you back here next time. I'll see you soon. Bye bye.