Ray Jia

The RMB gold price recorded its strongest year since the SGE’s launch in 2002. Firm prices continued to attract inflows into gold ETFs in December, culminating in their best year on record. The PBoC also extended its buying streak to 14 consecutive months. However, weakness in the gold jewellery sector – despite a seasonal uptick in December – more than offset robust investment demand, weighing on overall wholesale gold demand in 2025.

Global gold mining has been stable in recent years. Despite short-term impacts stemming from the pandemic, safety stoppages and industrial action, mined gold production averaged a near zero annual y/y change between 2018 and 2024. 

The recent VAT reform weighed on China’s gold jewellery demand in November, denting gold withdrawals from the Shanghai Gold Exchange despite robust investment buying. Gold ETFs in China continued to attract notable inflows in the month and the PBoC reported gold purchases 13 months in a row. 

Supported by investment strength, wholesale gold demand in China rose m/m and y/y during October, defying the seasonal weakness. Local gold ETFs also saw notable inflows, generally tracking the gold price. Meanwhile, the PBoC reported its 12th consecutive monthly gold purchase. Looking ahead, the VAT reform in China’s gold market may insert profound impact on different sectors of local gold demand.

China recently announced changes to the gold market value-added tax policies, effective from 1 November 2025 to 31 December 2027. Members who buy and sell gold directly on the SGE remain VAT free; meanwhile, members withdrawing physical gold and re-selling with investment purposes are not impacted, while those with non-investment purposes now face higher costs when they re-distribute. 

With higher costs, gold jewellery demand in China may face some headwinds, but it may can also be an additional catalyst for innovation amidst a competitive landscape. Investment demand is not directly impacted by the policy, but we may see greater concentration of gold buying through SGE members.

Supported by reviving investment strength and relatively more active retailer replenishment, wholesale gold demand in China rebounded during September. Meanwhile, the PBoC announced its 11th consecutive monthly gold purchase and Chinese gold ETF flows turned positive.

Global physically backed gold ETFs saw inflows three months in a row, adding US$5.5bn in August. North American and European funds led inflows while Asia experienced continued outflows. Supported by continued inflows and a higher gold price, global gold ETFs’ total AUM rose 5% to US$407bn, another month-end record. Meanwhile, holdings rebounded 53t to 3,692t.

China’s official gold reserves rose further in July, the ninth consecutive monthly purchase. Wholesale gold demand saw a modest m/m seasonal rise in July, yet they remained below the long-term average. Gold ETF flows flipped negative and gold futures’ volumes cooled.

China’s wholesale gold demand weakened further in June, ending H1 with a 18% y/y fall – bar and coin demand strength was offset by the jewellery sector weakness. A positive June concluded the strongest semi-annual Chinese gold ETF inflow ever and the PBoC announced non-stop gold purchases during H1.  

Gold has experienced a prolonged bull run in recent years. After bottoming at US$1,429/oz on 3 November 2022, the gold price has more than doubled: on 30 June 2025 it stood at US$3,287/oz, having refreshed its historical record 68 times over that period.

The PBoC continued to add gold to its reserves while Chinese gold investment momentum cooled. And wholesale gold demand weakened m/m due mainly to seasonal impact on gold jewellery consumption and slowing bullion sales.

Continued gold price strength and the US-China trade tensions pushed Chinese gold ETF demand to a record high in April. Gold futures trading activities in Shanghai also surged to unseen levels. Wholesale demand improved and the PBoC announced another gold purchase.

Another exceptional month for the gold price and trade tensions with the US led to continued boom in retail investment. Meanwhile, China’s official gold holdings rose five months in a row. And wholesale demand also picked up seasonally, resulting in an improving local gold premium.

China’s official gold holdings rose four months in a row, adding another 5t in February. And Chinese gold investors bought gold ETFs at a record pace in the month, pushing both AUM and holdings to unseen levels. However, gold jewellery demand weakness, amid seasonality and the rising gold price, weighed on total wholesale gold demand in the month.

Gold began 2025 with vigour: the LBMA Gold Price PM and the Shanghai Gold Benchmark Price PM both saw their strongest January in years, rising by 8% and 5% respectively.