China's Gold Demand Continues to Rise Despite Falling Prices, Driven by ETF Inflows, Investors and Central Bank Purchases

World Gold Council says Chinese gold ETFs led regional growth last month, with US$784 million in inflows, but jewellery demand was muted

· Rising Gold Demand: China's gold demand continues to grow despite a nearly 30% decline in prices from the record high reached in late January 2026, as consumers nd investors view lower prices as a buying opportunity.

· Jewellery Purchases Recover: Chinese gold jewellery purchases increased by 30% in Q3 2026 compared with Q2, although demand remained 22% lower year-on-year.

· Strong ETF Investments: Chinese gold ETFs attracted US$784 million in inflows in October 2026, recording the highest regional growth and ranking second globally after the UK.

· Increased Investment Demand: Demand for physical gold bars and coins has strengthened, making China one of the few major markets to record year-on-year growth in this segment during Q3.

· Economic Factors: Weak domestic equity markets and declining government bond yields have increased gold's attractiveness as an alternative investment. China's 10-year government bond yield fell to approximately 1.58%.

· Central Bank Gold Purchases: The People's Bank of China (PBOC) added 830,000 troy ounces of gold to its reserves in October 2026, marking its 24th consecutive month of gold purchases.

· Younger Consumers: Gold jewellery is gaining popularity among younger Chinese buyers due to modern designs and its dual appeal as both wearable jewellery and an investment.

· Global Price Pressure: Goldman Sachs lowered its year-end gold price forecast from US$4,650 to US$4,150 per troy ounce, citing the US Federal Reserve's hawkish stance and expectations of higher interest rates.

· Jewellery Buyers Remain Cautious: Despite recent recovery, some Chinese consumers are delaying purchases in anticipation of further price declines.

[ABS News Service/10.11.2026]

At Beijing’s Tianya Jewellery Market, a major gold bazaar in the Chinese capital, saleswoman Zhang Fan has seen more customers over the past few weeks.

“Many people see buying gold as a necessity for weddings, so that is not bound by timing,” Zhang said. “But there is another group of customers – those who feel that the current price is right.”

China’s demand for gold has continued to grow as prices fall, with some consumers, investors and the central bank continuing to purchase the metal even as many other parts of the world hold back.

Spot prices stood at around 880 yuan a gram (US$4,101 a troy ounce) on the Shanghai Gold Exchange on Monday, nearly 30 per cent lower than its all-time high in late January.

While prices have continued to weigh on overall gold jewellery demand, recent pullbacks have coaxed Chinese customers back into stores, with purchases in the third quarter of the year up 30 per cent compared with the previous quarter, according to the World Gold Council.

Zhang said gold jewellery had also gained more traction among younger customers as designs had grown more stylish over the past few years.

“It’s an investment that can also be worn,” she said.

Broader Chinese appetite for gold as a form of investment has also gathered momentum, with gold exchange-traded fund (ETF) holdings and demand for gold bars and coins rising in recent months.

Chinese gold ETFs attracted US$784 million in inflows last month, leading regional growth and ranking second globally behind only the United Kingdom, World Gold Council data showed. China was also one of the few markets worldwide where third-quarter demand for physical bars and coins grew year on year.

“Weaker domestic equities and falling government bond yields helped support gold’s relative appeal,” the World Gold Council said in a report published last week.

The yield on China’s benchmark 10-year government bond slipped to around 1.58 per cent on Monday – down around 0.1 percentage points from a month ago.

“Continued gold purchases by the [People’s Bank of China] would further boost confidence,” the World Gold Council said, adding that it expected Chinese investor demand to remain robust for the rest of the year.

The People’s Bank of China has emerged as one of the world’s leading central bank buyers of bullion. It added 830,000 troy ounces to its gold reserves last month, according to official data released over the weekend.

It was the 24th consecutive month that the central bank had increased its gold holdings, with its drive to diversify its reserves having gathered pace in recent months.

But while global central bank demand for gold remains supportive for gold prices in the long term, the United States Federal Reserve’s hawkish shift and an expected interest rate increase next month would put pressure on gold prices, Goldman Sachs said last week, when it lowered its gold price forecast for the end of the year to US$4,150 a troy ounce, down from US$4,650.

American investor demand for gold has dulled in recent months, as markets expect interest rates and bond yields to remain high for longer. Even though the US 10-year Treasury yield has cooled from its October peak, it remains elevated at above 4.8 per cent.

Consumer caution was evident in China in terms of demand for gold jewellery, the World Gold Council said. While Chinese consumption of gold jewellery recovered in the third quarter compared with the second, it was down 22 per cent year on year, council data showed.

In a quiet corner of the Tianya Jewellery Market, a salesman said the downward trend in gold prices could prompt some customers to wait for prices to fall further before making a purchase.

“When prices rise, everyone rushes in,” he said, recalling the strong foot traffic to his store when gold was hovering near 1,000 yuan a gram. “Right now, many are still trying to wait for the bottom.”