Investors in the China gold market have shown unprecedented enthusiasm recently, as indicated by various key metrics. In April, the Shanghai Benchmark Gold Price PM and LBMA Gold Price PM both saw significant increases, marking positive returns over several consecutive months. Jewellers, banks, and other market participants withdrew a notable amount of gold from the Shanghai Gold Exchange (SGE), while Chinese gold ETFs experienced their strongest month ever, adding substantial assets under management (AUM) and collective holdings.
Furthermore, gold futures volumes at the Shanghai Futures Exchange (SHFE) reached record highs in April, pointing to a surge in investor interest. The People’s Bank of China (PBoC) also continued its monthly gold purchases, adding to its already substantial gold holdings. Despite tepid gold imports in March and a weak Q1 overall, the market outlook remains positive, with expectations of continued support for gold investment demand in the long term.
Looking ahead, gold jewellery consumption may experience a temporary slowdown, but the recent price adjustments could provide some support. Similarly, investment demand for gold might cool off in the near future due to various factors like profit-taking and trade tensions. However, the overall outlook remains optimistic, driven by gold’s attractive performance, global economic uncertainties, and institutional investments from Chinese insurers.
Throughout April, global gold prices continued to rise, driven by a weaker dollar, geopolitical uncertainties, and strong inflows into gold ETFs. The RMB gold price saw its strongest January to April performance on record, while wholesale demand for gold rebounded significantly. Jewellers stocked up for the Labour Day Holiday, and bar and coin sales remained robust amid escalating US-China trade tensions.
Chinese gold ETFs witnessed unprecedented demand in April, adding substantial assets and holdings. The surge in ETF demand was fueled by local gold price performance, trade war concerns, and falling bond yields. Similarly, Chinese investor interest in gold futures reached unseen levels, with trading volumes hitting record highs. The PBoC’s consistent gold purchases also contributed to the positive sentiment in the market.
Despite tepid gold imports at the start of 2025, the overall market sentiment remains positive, with expectations of continued support for gold investment demand. The recent trends in the China gold market indicate a strong appetite for gold as a reliable investment option amid evolving global economic dynamics and geopolitical uncertainties.
