Chinese investors kept buying gold funds in September, lifting ETF holdings to a record 304 tonnes, the World Gold Council said. Jewellery buyers stayed cautious, and wholesale demand in the third quarter fell 21% from a year earlier.
At a glance
- Chinese gold ETFs took in RMB27 billion ($3.9 billion) in the third quarter, adding 27 tonnes.
- Withdrawals from the Shanghai Gold Exchange rose 48% in September but were still 22% lower than a year earlier.
- The People's Bank of China bought 63 tonnes in the quarter, its strongest quarter since 2023.
Background
China is the world's largest gold consumer. The World Gold Council (WGC), the industry body funded by gold miners, tracks Chinese demand each month. Gold exchange-traded funds (ETFs) let investors buy gold through the stock market. Withdrawals from the Shanghai Gold Exchange (SGE), where banks and jewellers buy physical gold, are a common gauge of wholesale demand.
What happened
Chinese gold ETFs grew by 11 tonnes in September, their third monthly rise in a row, the World Gold Council said in its China market update on October 15. Total holdings reached 304 tonnes, a month-end record. The value of those funds still fell 2% to RMB276 billion ($41 billion), because the gold price dropped during the month.
Physical buying was much weaker. Wholesale gold demand in China totalled 234 tonnes in the third quarter. That was 21% lower than a year earlier and 44% below the ten-year average of 418 tonnes, the WGC said.
Why investors and shoppers split
Investors are buying gold because other options look worse. Chinese stocks have fallen sharply, and government bond yields keep declining, which lowers the cost of holding gold, an asset that pays no interest. The central bank's steady gold purchases have also encouraged buying, according to WGC analyst Ray Jia.
Jewellery is the weak spot. Banks and jewellers withdrew 92 tonnes from the SGE in September, up 48% from August, as shops restocked ahead of the National Day holiday. Even so, withdrawals were 22% lower than a year earlier, because jewellery consumption remains well below past years.
What the central bank did
The People's Bank of China (PBoC) reported a 23-tonne purchase in September, its largest monthly buy since October 2023. That extended its buying streak to 23 months and lifted its third-quarter total to 63 tonnes. China's official holdings now stand at 2,410 tonnes, or 8.5% of its total reserves.
Gold steadied in early October, with the local price around RMB900 a gram and the international price above $4,100 an ounce. The WGC will publish more detail on China in its Gold Demand Trends report in early November.
Our read
Outlook: bullish. Record ETF holdings and steady central bank buying support gold. Weak jewellery demand in the biggest consumer market limits the upside.
What to watch
- The WGC's Gold Demand Trends report in early November, with full third-quarter data for China.
- Whether PBoC buying continues for a 24th month in October.
- Jewellery sales after the National Day holiday, the start of China's peak season.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-09-30: Chinese gold ETF holdings end September at a record 304 tonnes.
- 2026-10-15: The WGC publishes its China gold market update for the third quarter.
Demand Drivers
Falling Chinese stocks and lower bond yields are pushing investors into gold ETFs, while jewellery buying stays weak.
Interest Rates
Declining Chinese bond yields reduce the cost of holding gold for local investors.
Central Banks
The PBoC added 63 tonnes in the third quarter and 103 tonnes so far this year.
What could lift prices
- Chinese gold ETFs are on course for a record year of inflows, the WGC says.
- PBoC buying has continued for 23 months in a row.
What could weigh on prices
- Third-quarter wholesale demand was 44% below the ten-year average.
- Net long positions on Shanghai gold futures fell 5 tonnes in September to 149 tonnes.
Country impact
| Country | Impact | Reason |
|---|---|---|
| China | High | Investment and central bank buying are offsetting weak jewellery demand in the biggest gold market. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Jewellery | Negative | Chinese jewellery consumption is well below previous years, cutting wholesale demand. |
Who gains, who loses
- Chinese gold ETF providers: Holdings reached a record 304 tonnes after three months of inflows.
- Chinese jewellers: Weak consumer buying has left wholesale demand far below normal levels.
Other ways this could play out
- If Chinese stocks recover, some investors could move money out of gold ETFs.
- If holiday jewellery sales improve, wholesale demand could recover in the fourth quarter.
Price risks
- Further US rate hikes could pressure gold, as they did in September.
- A pause in PBoC buying would remove an important source of support.
Historical comparison
- Q3 2023: The PBoC's 63 tonnes in Q3 2026 was its strongest quarterly buying since Q3 2023.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
Related
China