WGC: Chinese Gold Reserves Surged for the Fifth Straight Month

SEATTLE (Scrap Monster): The China Gold Market Report published by the World Gold Council (WGC) suggested that the country’s gold reserves surged for the fifth consecutive month in March this year.

According to Ray Jia, Senior Analyst, China World Gold Council, the People’s Bank of China (PBoC) reported gold purchase of 18t in March. The quarterly gold purchases totalled 58t in Q1 2023. The country’s gold reserves stood at 2,068t at the end of the quarter.

The local gold demand in China improved, as reflected in the notable rise in average Shanghai-London gold price premium during the quarter. The gold withdrawals from the Shanghai Gold Exchange (SGE) totalled 157t in March. Meantime, the wholesale gold demand witnessed the strongest Q1 since 2019.

The Chinese gold ETFs witnessed first monthly inflows in 2023. The ETF holdings increased by 3.2t during the month. However, the overall flows remained negative during the initial quarter of the year.

WGC foresees slowdown in local gold consumption, which in turn could weigh on the wholesale gold demand in April and May. The elevated local gold price coupled with budget diversion from consumption sectors may add further pressure. However, there exists several upside potentials too, the WGC report noted.

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