China Boosts Gold Reserves at Fastest Pace in 15 Months

Gold ended April trading with relative stability, as the gold price according to the London LBMA benchmark in USD rose slightly by 0.1%, while the Shanghai benchmark price in Chinese yuan fell by only 0.4%, affected by the strength of the local currency, according to a report issued by the World Gold Council.

Strong Inflows into Gold ETFs

Gold-backed Exchange-Traded Funds (ETFs) in China witnessed strong inflows during April, adding approximately 3.5 billion yuan ($498 million). This raised total assets under management (AUM) to 306 billion yuan ($45 billion), while holdings rose to 301 tons, marking the highest monthly level recorded to date.

The report noted that gold prices in the Chinese market maintained levels above 1,000 yuan per gram during May, coinciding with the continued flow of investors into gold funds, despite the strong performance of the domestic stock market.

Decline in Wholesale Demand and Jewelry Seasonal Slack

In contrast, wholesale gold demand within China fell during April by 23% on a month-on-month basis to record 103 tons. This came as restocking operations by jewelry retailers and banks subsided, coinciding with the jewelry market entering its traditional slack season in the second quarter of the year.

Central Bank Purchases Continues

The People's Bank of China (PBOC) also announced the addition of 8 new tons to its gold reserves during April, marking the largest purchase operation since December 2024 and the 18th consecutive month of buying. This raised official reserves to 2,322 tons, representing about 9% of China's total foreign exchange reserves.

Key Drivers: The report explained that ongoing global geopolitical tensions, alongside falling Chinese government bond yields, supported local investors' interest in gold, despite a portion of liquidity shifting toward the stock market following the strong rally that began in early April.

Futures Trading and Foreign Trade Performance

Futures Contracts: Trading volumes on the Shanghai Futures Exchange declined by 31% during April due to lower price volatility and improved performance of domestic equities. However, the average daily trading volume remained higher than the five-year average.

Foreign Trade: China's gold imports during the first quarter of 2026 rose significantly, with net imports recording 316 tons—an increase of 182% compared to the previous quarter and 333% on a year-on-year basis. This surge was driven by robust investment demand for gold bars and coins, despite weak jewelry sales.