China’s gold market update indicates a notable rise in gold reserves

Gold traded sideways in April, ending the month flat. The LBMA Gold Price PM in USD and the SHAUPM in RMB were little changed. Early in the month gold rebounded from March weakness as easing Middle East tensions tempered inflation concerns and weighed on yields. However, renewed uncertainty around the Strait of Hormuz later in April drove oil prices higher, dampened Fed easing expectations, and reversed gold’s earlier gains. Chinese gold ETFs expanded further while futures volumes cooled. Chinese gold ETFs witnessed their eighth consecutive monthly inflow in April, attracting RMB3.5bn (US$498mn). Following another monthly expansion their total AUM reached RMB306bn (US$45bn), 1% higher m/m. Meanwhile, collective holdings increased 3t to 301t, another month-end peak. Continued global and regional geopolitical tensions during the month, as well as falling local government bond yields, sustained Chinese investor interest in gold. Nonetheless, inflows slowed as investors may have been diverted to the rallying equity market. With the local gold price stabilising in May, we see continued allocation to gold ETFs from local investors even as the local stock market kept rallying. 

Chinese gold futures trading activities cooled further in April. Despite a 31% m/m decline, volumes of gold futures traded at the Shanghai Futures Exchange (SHFE) – at 307t/day – remained well above the five-year daily average of 265t. Trader interest in gold futures weakened amid local stock market strength and easing gold price volatility. Gold withdrawals from the SGE totalled 103t in April, a 23% m/m fall (Chart 4). The m/m weakness followed a seasonal pattern: restocking falls in April as gold jewellery consumption enters its traditional Q2 off-season. Although there was some replenishment ahead of the early‑May Labour Day holiday – historically a boost for jewellery sales – the impact was limited as consumer spending continues to shift toward experiences such as travel. Meanwhile, bullion sales, while still healthy, cooled from the previous buying frenzy as strong equities and the easing gold price momentum dimmed investor interest in gold.  On a y/y basis, April wholesale demand fell 33%, due in part to a high comparison base: in 2025 demand reached its strongest April level since 2018. Weaker wholesale demand has, however, been evident generally this year, due mainly to the downturn in the gold jewellery sector.