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China Gold Demand Gains Momentum as Central Bank Buying Hits Multi-Year High
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.
What Readers Should Know
- The People’s Bank of China added 20 tonnes of gold in July, its largest monthly purchase since October 2023.
- Official gold holdings now total 2,366 tonnes, extending the buying streak to 21 consecutive months.
- Chinese gold-backed ETFs attracted 5 tonnes of inflows in July, reaching 282 tonnes.
- Physical wholesale demand stayed subdued; Shanghai Gold Exchange withdrawals fell 8% to 80 tonnes.
- Gold imports remained strong, with H1 2026 net imports up 138% to 764 tonnes.
- WGC noted sustained price gains could further lift investment demand.
Central Bank Buying Reaches Multi-Year High
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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ETF Inflows and Futures Sentiment Improve
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 Demand Subdued but Imports Stay Strong
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.
People Also Ask
How much gold did China’s central bank buy in July 2026?
The People’s Bank of China added 20 tonnes of gold in July 2026, its largest monthly purchase since October 2023.
What are China’s official gold reserves after July?
Official holdings reached 2,366 tonnes, extending the central bank’s buying streak to 21 consecutive months.
Did Chinese gold ETFs see inflows in July?
Yes. ETF holdings rose by around 5 tonnes to 282 tonnes, driven by stronger prices and market uncertainty.
How did physical gold demand perform in July?
Physical wholesale demand stayed subdued; Shanghai Gold Exchange withdrawals fell 8% month-on-month to 80 tonnes.
What was the trend for China’s gold imports in H1 2026?
Net imports in H1 2026 climbed 138% to 764 tonnes, with June’s 152 tonnes the highest monthly level since March 2024.
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Courtesy: ScrapMonster