China Gold Market Softens Despite Strong Central Bank Buying
Gold | 2026-06-15 09:32:48
The ETF gold holdings declined by 8.3 tonnes to 293 tonnes during the month.
By Paul Ploumis
SEATTLE (Scrap Monster): China’s gold market witnessed mixed trends in May, with weakening investment demand and subdued jewellery consumption, even as the country’s central bank accelerated its gold purchases.
Chinese gold exchange-traded funds (ETFs) recorded their first monthly outflow since August 2025, ending an eight-month streak of inflows. Investors withdrew RMB 8.2 billion (US$1.2 billion) during the month, reducing total assets under management by 5% to RMB 289 billion (US$43 billion). The ETF gold holdings declined by 8.3 tonnes to 293 tonnes during the month.
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Wholesale gold demand also weakened significantly. Gold withdrawals from the Shanghai Gold Exchange totaled 64 tonnes in May. According to market analysts, the decline was mainly on account of easing safe-haven demand, a lack of strong gold price momentum, and continued challenges in the jewellery sector.
In contrast, the People's Bank of China reported a 10-tonne increase in its gold reserves during May, lifting the country’s official gold holdings to 2,332 tonnes, representing 8.9% of the country’s foreign exchange reserves.
Looking ahead, further dips in gold prices are likely to keep buyers cautious, thus resulting in subdued investment demand.
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Frequently Asked Questions
- What was the key trend in China's gold market during May?
The market experienced weaker investment and jewellery demand, while official-sector gold purchases increased significantly.
- How did Chinese gold ETFs perform in May?
Chinese gold ETFs saw net outflows of RMB 8.2 billion (US$1.2 billion), ending an eight-month streak of inflows.
- What happened to ETF gold holdings?
Total holdings declined by 8.3 tonnes to 293 tonnes during the month.
