Geopolitics was in the spotlight last week. While the Trump-Xi summit resulted in a two-month extension of the US-China trade truce, the stalemate in the US-Iran conflict persisted, keeping energy prices elevated and inflation concerns in focus. Economic data presented a mixed picture across major economies: business activity strengthened in the US, Eurozone and India, but softened in Japan and the UK. Meanwhile, US labor markets continued to reflect strength.
In August, PBOC reported a 20t gold purchase, the strongest month since October 2023. Chinese gold ETFs registered healthy inflows during the month, helped by the improved gold price momentum. Gold withdrawals from the SGE fell m/m, largely due to cooling bullion investment and the ongoing gold jewellery sector weakness
China’s official gold holdings saw a 10t rise in May, reaching 2,332t (9% of total reserves), the largest reported increase since December 2024. Yet wholesale gold demand fell notably, dented by both seasonal weakness in the jewellery sector and cooling investment momentum – monthly gold ETF flows turned negative for the first time since last August.
Wholesale gold demand fell seasonally in April as gold jewellery consumption entered the traditional off season. Investment strength also eased with Chinese gold ETF inflows moderating. Meanwhile, the Chinese central bank added 8t of gold to its reserves, the highest in 15 months.
A decline in March narrowed gold’s Q1 gain. Wholesale gold demand rebounded notably m/m supported by seasonality. Local gold ETFs saw continued inflows in March, pushing the Q1 demand to a record high. The PBoC’s gold purchasing streak extended to 17 months in March. And gold imports during the first two months of 2026 rose.
Gold rose in USD terms but fell when priced in RMB – due mainly to the strengthening currency. Wholesale gold demand stayed relatively resilient in February, the Chinese New Year month, compared to the similar period in 2025. Local gold ETFs saw further inflows and the PBoC announced gold purchases 16 months in a row.
In this episode of Unearthed, hosts Joe Cavatoni and John Reade examine the shifting dynamics of China - the world’s most important gold market for more than a decade.
The local gold price kicked 2026 off with its strongest January on record. And while it pulled back sharply in late January and early February, gold bounced back since. In January, investment demand benefited from the powerful gold price rally – bullion sales at gold stores surged and Chinese gold ETFs’ holdings expanded sizably. Meanwhile, the PBoC keeps reporting gold purchases, further boosting retail investors’ interest. Gold jewellery demand also improved amid retailers’ pre-Chinese New Year holiday restocking.
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.
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.
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.
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.
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.
