China’s gold market remained buoyant in April, driven by robust price gains, surging investment demand, and continued official purchases, according to the latest data from the World Gold Council.
Gold Prices Extend Strong Rally
Global gold prices continued their upward trajectory in April, supported by a weaker U.S. dollar, heightened geopolitical and economic uncertainties, and sustained inflows into gold exchange-traded funds (ETFs). The London Bullion Market Association (LBMA) Gold Price PM in U.S. dollars delivered its strongest April performance since 2011, while the Shanghai Gold Benchmark Price (SHAUPM) in renminbi (RMB) posted its best April return in 19 years.
Over the first four months of 2025, RMB-denominated gold prices recorded a cumulative return of 24%, the highest January-April performance on record. In comparison, the LBMA Gold Price PM surged 27% during the same period, with the discrepancy largely attributed to the RMB’s 1% appreciation year-to-date.
Wholesale Demand Strengthens
China’s wholesale gold demand also rebounded in April. Gold withdrawals from the Shanghai Gold Exchange (SGE) rose to 153 tonnes, marking a 27% increase month-on-month and a 17% gain year-on-year. The rising demand was reflected in the local gold price premium, which averaged $37 per ounce in April, a significant jump from $2 per ounce in March.
Key drivers of this demand included strong investor interest in gold bars and coins amid escalating U.S.-China trade tensions, as well as restocking by jewellers ahead of the Labour Day holiday in early May.
Record-Breaking ETF Demand
Chinese gold ETFs experienced their strongest month on record in April, attracting RMB 49 billion (approximately $6.8 billion) in net inflows. This marked the third consecutive month of positive inflows, lifting total assets under management (AUM) to RMB 158 billion ($22 billion), a 57% increase from March. Holdings surged by 65 tonnes to reach a record 203 tonnes.
The unprecedented surge in ETF demand was fueled by gold’s stellar local price performance, concerns over the U.S.-China trade conflict, and falling domestic bond yields amid expectations of further monetary easing. Between January and April, Chinese gold ETFs saw their AUM and holdings grow by 125% and 77%, respectively.
While ETF demand remained positive entering May, the pace of inflows has slowed. Analysts attribute this to the easing of trade uncertainties following the U.S.-China Geneva trade talks and a stabilisation of local gold prices.
Gold Futures Trading Hits Record Highs
Investor interest in gold futures also soared in April. The average daily trading volume of gold futures on the Shanghai Futures Exchange (SHFE) doubled month-on-month to a record 859 tonnes. This spike was driven by heightened price volatility and gold’s strong market performance, attracting increased trader activity.
Although trading volumes moderated slightly in early May, average daily volume during the first five trading days remained near record highs at 756 tonnes, underscoring persistent investor enthusiasm.
People’s Bank of China Extends Gold Buying Streak
The People’s Bank of China (PBoC) continued its steady accumulation of gold reserves in April, purchasing an additional 2.2 tonnes. This marked the sixth consecutive month of official gold purchases, bringing China’s total gold reserves to 2,295 tonnes, or 6.8% of its overall foreign exchange reserves. In value terms, these holdings rose to $243.6 billion, a 6% month-on-month increase. Year-to-date, China has added 14.9 tonnes to its official gold holdings.
Gold Imports Remain Subdued
Despite the strong domestic demand, China’s gold imports remained sluggish in early 2025. Net imports totaled 46 tonnes in March, a 14-tonne increase from February but still significantly below the 183 tonnes imported in March 2024. For the first quarter of 2025, total imports stood at 73 tonnes, the lowest since 2021, when COVID-related restrictions hampered trade.
Weaker gold jewellery demand during Q1 was a key factor in the import slowdown, which in turn suppressed local gold premiums and at times even resulted in discounts, further discouraging imports.
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