China Gold Demand Gains Momentum as Central Bank Buying Hits Multi-Year High
Gold | 2026-08-17 04:56:05
The WGC noted that a sustained rise in gold prices could lead to a further rise in investment demand.
By Paul Ploumis
SEATTLE (Scrap Monster): China’s gold market showed mixed signals in July, with strong central bank purchases and renewed investor interest helping offset weak jewellery demand, noted the World Gold Council (WGC). Gold prices were largely stable during the month, while investment activity improved.
The People’s Bank of China (PBoC) increased its gold reserves by 20 tonnes in July, marking its biggest monthly addition since October 2023. The bank’s official gold holdings now stand at 2,366 tonnes. The purchase has extended its buying streak to 21 consecutive months.
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Chinese gold-backed exchange-traded funds also attracted fresh inflows. ETF holdings increased by around 5 tonnes during July to reach 282 tonnes. The positive flows were mainly driven by stronger gold prices and continued market uncertainty, WGC noted..
Trading in Shanghai gold futures eased, with average daily volumes on the Futures Exchange down 4% month-on-month to about 292 tonnes. However, net long positions increased, suggesting improving investor sentiment.
Physical wholesale demand remained subdued. Gold withdrawals from the Shanghai Gold Exchange declined 8% from June to 80 tonnes. China’s gold imports also remained strong. The net imports in June reached 152 tonnes, registering the highest monthly level since March 2024. The imports during H1 2026 climbed 138% to 764 tonnes.
The WGC noted that a sustained rise in gold prices could lead to a further rise in investment demand.
POLL
Which factor provided the strongest support to China’s gold market in July?
Frequently Asked Questions
- How much gold did China’s central bank purchase in July?
The People’s Bank of China added 20 tonnes of gold to its reserves in July, marking its largest monthly purchase since October 2023.
- What was the total gold reserve held by the PBoC after its July purchase?
The PBoC’s official gold holdings reached 2,366 tonnes following the July purchase. The buying streak has now continued for 21 consecutive months.
- How did China’s physical gold demand perform?
Physical wholesale demand remained subdued. Gold withdrawals from the Shanghai Gold Exchange declined 8% from June to 80 tonnes. However, gold imports remained strong, with H1 2026 net imports rising 138% to 764 tonnes.
