Gold investment boom in China seen strong in short-term, says WGC's Ray Jia
This story was originally published at 17:55 IST on 15 April 2025
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MUMBAI – The Chinese investment demand for gold is expected to remain strong in the short-term, as the escalating US-China trade war hurts growth and local assets, according to World Gold Council's Research Head (China) Ray Jia. The strength in the global gold price, boosted by a re-structuring of the world trade order and world market volatility, will provide further support, Jia said in a report.
China's gold exchange-traded funds witnessed inflows of $772 million in March. The Jan-Mar quarter saw inflows equivalent to 23 tonnes, or $2.3 billion, reaching record levels, Jia said. "The unprecedented gold price surge, shaky confidence in other domestic assets, as well as growth concerns stemming from escalating trade conflicts with the US, all contributed to strong Q1 flows," he said.
Chinese gold exchange-traded funds' collective holdings rose by 29 tonnes in the first two weeks of April, while assets under management jumped 25% on sustained gold price strength, Jia said. The upcoming May Labour Day holiday sales boost, record high gold prices and economic worries are clouding the jewellery demand outlook, though safe-haven buying may offer a cushion, Jia said.
The People's Bank of China added 2.8 tonnes of gold to its reserves in March, the fifth consecutive month of gold purchases. As of March-end, gold reserves with the Chinese central bank jumped to 2,292 tonnes, accounting for 6.5% of the total foreign exchange reserves, according to Jia.
Gold imports during the first two months of 2025 were tepid on weak demand and local price discounts during the period. The country imported merely 17 tonnes in January, the lowest since February 2021 when imports were hit by COVID-19 restrictions. Bullion import showed an uptick in February increasing to 76 tonnes, but remained below the 2024 monthly average of 102 tonnes, Jia said. End
US$1 = INR 85.77
Reported by Sandeep Sinha
Edited by Saji George Titus
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