Alasdair Macleod: China's Gold Strategy, Yuan Backing, and Precious Metals Outlook

China's Strategic Gold Accumulation

• 💡 China has a long-term plan to put the yuan on a gold standard, carefully preparing the ground to avoid blame for disrupting the fiat currency system.
• 🔑 The People's Bank of China began secretly accumulating gold in 1983, increasing mine production, refining capacity, and buying in international markets.
• 📊 By 2002, China had accumulated an estimated 25,000 tons of gold and subsequently encouraged its citizens to buy gold through the Shanghai Gold Exchange.
• 🌱 Chinese savers are increasingly investing in gold accounts due to uncertainties in the property and stock markets, with 28,000 tons delivered into public hands.

The Yuan's Gold-Backed Future

• 🚀 China is establishing Shanghai Gold Exchange vaults in Hong Kong and Saudi Arabia specifically for trade settlement purposes.
• 🤝 This system aims to function as a Chinese version of the Bretton Woods agreement, facilitating swaps between the yuan and gold for international trade.
• 💰 The domestic yuan might be pegged to silver, potentially creating a 15:1 gold-silver ratio, leveraging China's ring-fenced domestic market through exchange controls.

US Economic Landscape & Precious Metals

• 📈 As of early 2026, the Federal Reserve's benchmark rate is held in the target range of 3.50%-3.75%, with future cuts dependent on economic data.
• ⚠️ Inflation remains a concern, with the CPI up 2.7% year-over-year and core inflation at 2.6%, impacting investor sentiment.
• 📊 The US national debt stands at approximately $38.6 trillion, making markets extra sensitive to surprises due to high debt and meaningful interest rates.

Gold and Silver Market Dynamics

• 🔍 As of February 2026, spot gold is hovering near $4,980/ounce and spot silver around $78/ounce, resulting in a 63:1 gold-silver ratio.
• 🛡️ Gold is best viewed as a **