One of my first challenges as U.S. Mint Director was developing a marketing plan for a commemorative coin program that would help fund the staging of the 1996 Atlanta Summer Olympic Games. There is a long history of Congress mandating the minting and sale of commemorative coins for public or private purposes like this. In this case, Congress hoped to raise millions of dollars from the sale of gold, silver, and clad coins to support the games. This program was, and remains, the largest commemorative coin program in U.S. history and, in all likelihood, the largest any nation has undertaken.
The only way we could meet these expectations was to undertake a global marketing campaign to reach tens of millions of Olympic coin collectors around the world. In the end, our distribution network encompassed more than two dozen countries and all seven continents—yes, including Antarctica.
One of the first overseas markets we targeted, due to its size, was the People's Republic of China (PRC).
The hitch, however, was that for half a century the PRC had prohibited the sale of foreign precious metal coins within its borders. Our ambitions required us to obtain approval from the highest levels of the government.
At the time, in 1994, China was seeking Most Favored Nation trading status with the U.S. I knew this was a high priority of the Chinese government, so I thought it might give us leverage to open the market. I asked Treasury Secretary Lloyd Bentsen to send a letter to the governor of the People's Bank of China requesting a meeting to discuss the matter. The governor agreed, I flew to Beijing, and long story short (and it is quite a story), the $1 million agreement we reached marked, as The New York Times reported, “the first time the Chinese Government has authorized import and promotion of foreign commemorative coins in China.”
Another 20 years would pass before the PRC granted gold import licenses to foreign banks.
Today, 30 years after the U.S. Mint opened China to foreign gold coins, the PRC is the largest consumer and investor gold market in the world.
From late 2022 to early May 2024, the price of gold rose nearly 50%. A large portion of this gold demand has been driven by China.
On May 5, 2024, The New York Times reported: “Often considered a safe investment during times of geopolitical and economic turmoil, gold has soared in price in response to Russia’s invasion of Ukraine and the war in Gaza. But gold’s climb to highs above $2,400/oz. has proved more resilient, and lasted longer, because of China.”
For thousands of years, the Chinese have been savvy gold buyers.
Once again, they are demonstrating the value of gold as a means of protecting personal wealth during times of geopolitical strife and economic uncertainty.
The PRC is a long way from solving its economic woes, and until they do, Chinese buyers will continue to fuel this extraordinary rally in gold prices.
