Insights

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.

Last week marked the end of the longest US government shutdown, while economic updates from major economies painted a mixed picture. Meanwhile, expectations for further Fed rate cuts waned after hawkish comments from officials. 

Recently, I joined Asharq Business on Bloomberg TV to discuss the latest developments in the anticipated US-China trade agreement and its impact on gold within the financial landscape.

In this episode of Unearthed, hosts Joe Cavatoni and John Reade, Senior Market Strategists at the World Gold Council, are joined by Sachin Jain, CEO of the World Gold Council India, to explore the pivotal role of India in the global gold market.

Last week’s economic updates highlighted uneven global momentum. US consumer sentiment dipped close to record lows, and European central banks kept rates steady. China’s exports fell and Japan’s manufacturing slowed, whereas India’s manufacturing gained pace.

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.

Central banks reported 39t of net purchases in September via the IMF and other public data sources. This buying was up 78% m/m and is the highest month of reported net buying in 2025 so far. Y-t-d, central banks have reported 200t of net gold buying.*

Last week saw a thaw in US-China relations with a temporary trade agreement, alongside  divergent central bank actions. While the Fed and Bank of Canada lowered rates, the ECB and BoJ held steady.

Last week, global economic updates reflected both momentum and headwinds. US inflation eased and business activity strengthened, Eurozone and India saw manufacturing gains, while China and Japan reported uneven growth.

Uncertainties and vulnerabilities remain across geopolitical, fiscal, and trade domains. Importantly, the core reasons for considering alternative assets such as gold, as outline in our May report, remain largely unchanged. 

Last week presented a mixed global macro picture. US-China trade tensions eased. The US government shutdown continued.

Gold continues its extraordinary price rally, having reached 48 all-time highs this year. Geopolitical tensions, strong investment demand, dollar weakness, financial market risk and expectations of dovish Fed policy lifted international prices by 11.6% in September and by an additional 7.9% in the first two weeks of October, pushing past the US$4,000/oz milestone.

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.

In this episode of Unearthed, hosts John Reade and Joseph Cavatoni, Senior Market Strategists at the World Gold Council, discuss the current state of the gold market.

Last week was a rollercoaster of highs and lows. Israel and Hamas agreed a peace plan, while US-China trade tensions re-escalated.

Gold reached another historic milestone on 8 October 2025 as it broke through US$4,000/oz. And while it finished the week below the record high, it’s en route to mark its strongest performance in a calendar year since 1979.

More mixed data across the globe last week with US PMIs at loggerheads over whether the economy is reflating or stagflating. 

Central banks added a net 19t to global gold reserves in August, based on reported data from both the IMF and respective central banks. This is broadly in line with monthly net purchases between March and June, and signals a return to buying form after global reserves were unchanged in July.

Last week saw a mixed bag of PMI data: US, UK and India all softer but all remain in expansion territory. 

Last week saw a mix of central bank actions. The US Fed cut 25bps as expected yet with a less dovish tone while the BOE held rates unchanged and slowed its QT.