China is making a bid to expand its influence in global gold markets by offering to hold foreign central bank reserves within its borders. The People’s Bank of China has pitched the idea to friendly central banks, with at least one Southeast Asian country expressing interest.

The move would strengthen Beijing’s role as a bullion hub and reduce reliance on Western financial centers. Custodian services are crucial to attract more trading activity and enhance credibility in the gold market.

Foreign central banks have been able to store gold in Shanghai since 2014, but uptake has been minimal. A Southeast Asian country, potentially tied to the mBridge cross-border payments project, could be evaluating the option.

Central bank demand has driven a rally in bullion, with spot gold reaching $3,784.74 an ounce in New York on Monday. Gold closed last week at $3,789.80, up 43.59% year-to-date, outperforming bitcoin, the S&P 500, and the Nasdaq Composite.

Analysts expect gold’s bullish momentum to continue, citing inflation trends and demand for alternatives to U.S. Treasurys. Investors are turning to gold as a substitute for the dollar, despite overbought conditions in the market.

China faces competition from London, which holds over 5,000 tons of global reserves in its vaults. While China ranks fifth among central bank gold holders, its domestic market for gold jewelry, bars, and coins remains the largest in the world.

Read more at Yahoo Finance.: As Gold Keeps Setting New Highs, China Reportedly Wants to Be Its Custodian for Central Banks