China’s gold market delivered another month of robust investment inflows and aggressive central‑bank buying, even as both international and domestic gold prices ended April essentially unchanged. According to Ray Jia, Head of China Research at the World Gold Council (WGC), the LBMA Gold Price PM rose only 0.1%, while the Shanghai Gold Benchmark Price PM (SHAUPM) dipped 0.4% .
Gold Prices Flat, but Macro Forces Drove Volatility
Gold traded sideways throughout April. Early‑month gains—driven by easing Middle East tensions and softer inflation expectations—were later erased as renewed uncertainty around the Strait of Hormuz pushed oil prices higher and weakened expectations for Fed rate cuts .
Chinese Gold ETFs: 8th Straight Month of Inflows
Despite flat prices, Chinese gold ETFs expanded for the eighth consecutive month, attracting RMB 3.5 billion (US$498 million) in April. Total ETF AUM reached RMB 306 billion (US$45 billion), with holdings rising to a record 301 tonnes .
Drivers included:
Elevated geopolitical tensions
Falling local government bond yields
Continued safe‑haven demand
A stabilizing gold price above RMB 1,000/g in early May
However, inflows slowed slightly as some investors rotated into China’s rallying equity market.
Futures Trading Cools but Remains Historically Strong
Gold futures volumes on the Shanghai Futures Exchange (SHFE) fell 31% m/m to 307 tonnes/day, yet remained well above the five‑year average of 265 tonnes/day. Lower volatility and strong equity performance reduced speculative interest .
Wholesale Physical Demand Drops Seasonally
Withdrawals from the Shanghai Gold Exchange (SGE) fell 23% m/m to 103 tonnes, consistent with seasonal Q2 weakness in jewelry demand. Additional factors:
Consumers shifting spending toward travel and experiences
Bullion buying cooling after March’s frenzy
Limited restocking ahead of the early‑May Labour Day holiday
On a yearly basis, wholesale demand was down 33%, partly due to an unusually strong April 2025 base.
PBoC Makes Largest Gold Purchase Since December 2024
China’s central bank extended its 18‑month gold‑buying streak, adding 8 tonnes in April—its biggest monthly purchase since late 2024. This lifted official holdings to 2,322 tonnes, representing 9% of total reserves, which themselves rose to US$3.8 trillion .
Other independent reports confirm the PBoC added ~260,000 ounces, the largest increase in 14 months, reinforcing China’s long‑term diversification away from USD assets .
Gold Imports Surge in Q1
China imported 143 tonnes of gold in March (+49% m/m), bringing Q1 net imports to 316 tonnes, up 182% q/q and 333% y/y. This reflects:
Strong bullion investment
Positive local price spreads
Opportunistic buying during March’s price correction
Regional Context: Asia Leads Global ETF Rebound
April also saw a global ETF inflow of US$6.6 billion, reversing March’s record outflows. Asia contributed US$1.8 billion, with:
Mainland China: US$498 million
Hong Kong: Record US$732 million, boosted by the new CSOP Gold ETF launch
This confirms China’s role as the largest driver of gold ETF demand in Asia.
Outlook: Weak Jewelry Demand, Steady Investment Demand
The WGC expects:
Jewelry demand to remain soft through the traditional Q2 off‑season
Bullion investment to stay cautious due to the equity rally and lack of a clear gold price trend
ETF inflows to continue, supported by price stabilization and geopolitical uncertainty
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