Gold extended its strength in December, ending 2025 with its best annual performance in decades for both the Shanghai Benchmark Gold Price PM (SHAUPM) in RMB and the LBMA Gold Price PM in USD.
December wholesale demand rebounded seasonally, although 2025 marked the third consecutive year of declines – weakness in gold jewellery more than offset robust investment demand.
Chinese gold ETFs witnessed inflows for four consecutive months, ending 2025 as the strongest year ever – total assets under management (AUM) surged 243% to RMB 242 billion (US$35 billion), while holdings more than doubled to 248 tonnes. Meanwhile, gold futures volumes at the Shanghai Futures Exchange (SHFE) reached record highs.
The People’s Bank of China (PBoC) announced monthly gold purchases throughout 2025, ending the year with a 27-tonne addition, pushing China’s official gold holdings to 2,306 tonnes, representing 8.5% of total reserves.
China’s gold market underwent significant changes in 2025, marked by a notable divergence between declining gold jewellery consumption and strong investment demand. The World Gold Council will release the full-year 2025 Gold Demand Trends report later this month, reviewing 2025 and providing an outlook for 2026.
Strong Year Ends with a Positive December
Global gold prices carried momentum into the final month of 2025, closing the year with performances not seen in decades. Elevated geopolitical risks, strong option market activity, and robust ETF inflows supported gold prices.
The LBMA Gold Price PM in USD and Shanghai Benchmark Gold Price PM (SHAUPM) in RMB rose 4.2% and 2.8%, respectively. The significant appreciation of the RMB against the USD limited SHAUPM’s monthly gains.
Gold priced in RMB recorded its strongest annual performance since 2002, the year the SGE was established, surging 58%, while its USD counterpart soared 67%, the best annual gain since 1979. However, the strong RMB and weaker physical demand, particularly in the jewellery sector, constrained price strength.
Wholesale Gold Demand Rebounds in December but Falls for 2025
115 tonnes of gold were withdrawn from the Shanghai Gold Exchange (SGE) in December, a 36% month-on-month increase. Market participants indicated that wholesale demand for gold jewellery picked up in the second half of the month as price momentum paused and retailers prepared for year-end sales – a typical seasonal factor.
Pressure from the VAT reform persisted, adding a tax burden on gold jewellery, yet consumers and jewellers adapted, and sales began normalizing from the initial panic in November. Nonetheless, wholesale gold demand fell 6% year-on-year in December, affected by both higher gold prices and the VAT reform.
For the full year 2025, total gold withdrawals from the SGE amounted to 1,298 tonnes, 11% lower year-on-year and 28% below the 10-year average. Weakness in the jewellery sector outweighed investment demand, resulting in a decline in overall wholesale demand.
Chinese Gold ETFs See Record Year
Chinese gold ETFs experienced four consecutive months of inflows, adding RMB 3.9 billion (US$545 million, 3.8 tonnes) in December. Strength in the gold price and heightened geopolitical tensions were key drivers.
During 2025, Chinese investors purchased RMB 112 billion (US$15.5 billion, 133 tonnes) of gold ETFs, marking the strongest annual inflows ever. Record inflows and the price rally increased total ETF AUM to RMB 242 billion (US$34.6 billion), up 243% from 2024, while holdings more than doubled (+116%) to 248 tonnes, both at historic highs.
Gold Futures Trading Reaches Record Volumes
Average daily trading volumes of gold futures in December were 390 tonnes, 15% lower month-on-month but still well above the five-year average of 216 tonnes/day. Volatility in gold prices remained a key factor driving trader interest.
For 2025 overall, average daily futures volumes reached 457 tonnes, a 52% increase year-on-year, the highest ever. Rising prices and increased hedging needs attracted both traders and industrial participants, significantly boosting volumes.
China’s Gold Reserves Increase Monthly
The PBoC reported gold purchases for the 14th consecutive month, adding 0.9 tonnes in December. By the end of 2025, China’s official holdings reached 2,306 tonnes, representing 8.5% of total foreign exchange reserves.
Monthly purchase announcements throughout the year, totaling 27 tonnes, likely encouraged retail investors to buy gold, supporting both bullion sales and ETF demand.
Imports Rebound, but Year-on-Year Weakness Remains
China’s net gold imports reached 47 tonnes in November, a 12-tonne month-on-month increase, but still significantly below prior years (-60 tonnes y/y). More working days in the month may have supported the monthly increase. However, the VAT reform and local price discounts amid weak demand discouraged imports.
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