China is reportedly making a bid to expand its influence in global gold markets by offering to hold foreign central bank reserves within its borders.

According to Bloomberg, the People’s Bank of China has used the Shanghai Gold Exchange in recent months to pitch central banks in friendly countries on the idea. At least one Southeast Asian country has shown interest, people familiar with the matter said.

The push would allow Beijing to strengthen its role as a bullion hub and reduce reliance on Western financial centers. Custodian services are a key part of that infrastructure, helping to attract more trading activity and enhance credibility.

Gold analyst Jan Nieuwenhuijs noted on X that foreign central banks have technically been able to store gold in Shanghai since 2014 but uptake has been minimal so far. He added that one Southeast Asian country, possibly tied to the mBridge cross-border payments project, could be evaluating the option.

The timing comes as central bank demand has underpinned a powerful rally in bullion.

Spot gold climbed as high as $3,784.74 an ounce in New York on Monday, setting another record before easing slightly. According to MarketWatch, the metal closed last week at $3,789.80, up 43.59% year-to-date — well ahead of bitcoin’s 17% gain, the S&P 500’s 12.96% rise and the Nasdaq Composite’s 16.43% increase.

Kitco News reported that despite overbought conditions, analysts expect gold’s bullish momentum to continue, citing inflation trends and growing demand for alternatives to U.S. Treasurys. Chris Mancini, co-portfolio manager at Gabelli Funds, said investors are increasingly turning to gold as a substitute for the dollar.

Still, China faces competition from established markets such as London, whose vaults hold more than 5,000 tons of global reserves. The World Gold Council ranks China fifth among central bank gold holders, but its domestic market for jewelry, bars and coins remains the world’s largest.