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Informist, Thursday, Aug. 14, 2025

MUMBAI – The World Gold Council expects continued seasonal improvement in China's wholesale gold demand in the third quarter of 2025, particularly in the gold jewellery sector, Ray Jia, research head (China) at WGC, said in a report. However, the affordability of gold jewellery might be an issue due to high prices and this may keep volumes depressed, Jia added.

In July, there was a modest seasonal rise in wholesale gold demand in China. Gold withdrawals from the Shanghai Gold Exchange totalled 93 tonnes in July, up 3 tonnes from the previous month and 4 tonnes on year. "...the m/m (month-on-month) pick up is mainly seasonal: jewellery demand tends to improve into Q3 (Jul-Sept)," Jia said. 

Prices of the precious metal saw a modest rise in July as rising inflationary concerns and various other risks outweighed a stronger dollar. "... we believe better sales of gold bullion – as physical gold investors took advantage of the current price stability – also contributed to wholesale gold demand's rebound in July," Jia said. However, wholesale demand during the month was well below the 10-year average, highlighting the weakness in wholesale demand this year.

Chinese gold exchange-traded funds witnessed outflows worth $325 million in July, Jia said. The total assets under management of gold exchange-traded funds fell 1% to $21 billion in July and collective holdings fell 3 tonnes to 197 tonnes last month. Despite the losses in July, Chinese gold exchange-traded funds year-to-date inflows remained at a record high of $8.5 billion. A rebound in economic resilience in the country, as China's Apr-Jun GDP exceeded expectations, and cooling expectations of further rate cuts from the People's Bank of China, combined with the lack of a clear trend in local gold prices, dimmed investors' interest in gold ETFs during the month, Jia said.

Meanwhile, the People's Bank of China purchased 2 tonnes of gold in July, the ninth consecutive monthly addition. China's official gold holdings are now at 2,300 tonnes, nearly 7% of their total reserves. The central bank has bought 21 tonnes of gold this year. China imported 50 tonnes of the precious metal in June, 45% lower than the previous month, mainly because of tepid wholesale demand during that month, Jia said. In the first half of 2025, China's gold imports have plunged 62% on year to 323 tonnes. "China's wholesale gold demand has weakened notably in H1 (Jan-Jun). And this has likely suppressed the need to import."  End

US$1 = INR 87.57

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ashutosh Pati

Edited by Subhojit Sarkar

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