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Informist, Wednesday, Apr. 15, 2026

 

MUMBAI – Demand for gold jewellery in China may soften during the second quarter (Apr-Jun) as it is traditionally weak season for consumption, although stable prices could provide some support to buying trends, according to Ray Jia, head of research (Asia Pacific, ex-India) and deputy head of trade engagement (China) at the World Gold Council. Investment demand is likely to gain support from declining bond yields and the lack of other local investment opportunities. However, the overall trajectory of gold prices' will remain key to investor decisions, Jia added.

 

Gold prices plunged in March. The London Bullion Market Association's gold prices fell 12% in March, weighed down by fading expectations of a rate cut by the US Federal Reserve due to inflationary fears stemming from the West Asia war, Jia said. The Shanghai Gold Benchmark Price saw a similar pullback of 11%, although a depreciating yuan limited the extent of the decline.

 

In March, banks, jewellers and refiners withdrew 134 tonnes gold from the Shanghai Gold Exchange, marking a 57% on-month rebound and a 12% increase on year. "The m/m (month on month) recovery was largely seasonal, reflecting more working days in March (22 vs 14 in February) and post–Chinese New Year restocking by industry participants. We believe the gold price pullback also encouraged opportunistic replenishment," Jia said. 

 

This price trend likely supported the on-year increase, as the sharp gold price rally in March last year had dampened jewellers' restocking appetite. However, this March, wholesale demand remained below the ten-year average, underscoring continued weakness in the jewellery sector, Jia said. A firmer March lifted the Jan-Mar wholesale demand to 345 tonnes, up 3% on year but still 23?low the ten-year average. "Overall, Chinese gold demand continued to diverge in line with trends observed in 2025: as gold prices surged through most of Q1, strong investment demand offset persistent weakness in gold jewellery consumption," Jia said.

 

Chinese gold exchange traded funds recorded inflows for a seventh straight month in March, attracting $1.7 billion, equivalent to an 8.4-tonne rise in holdings, Jia said. Investor interest remained strong despite a sharp drop in local gold prices, a weaker currency, and heightened safe-haven demand prompted by the US-Israel-Iran war. Some 'buying the dip' was also seen early in March. In Jan-Mar, total inflows reached $8.5 billion, marking a record-breaking quarter. Assets under management rose 26% to $44 billion, while holdings climbed to 298 tonnes, both hitting new record highs, Jia said.

 

Chinese gold futures trading volume declined 12% on month to an average of 443 tonnes per day in March, mainly due to reduced price volatility and weaker price momentum, which dampened trading interest, Jia said. Over the course of Jan-Mar, gold futures trading at the Shanghai Futures Exchange averaged 468 tonnes per day, significantly above the five-year average of 265 tonnes per day.

 

The People's Bank of China reported its 17th straight monthly gold purchase in March, adding 5 tonnes, its highest since February 2025 and lifting total reserves to 2,313 tonnes. "Non-stop buying throughout the quarter has accumulated an additional 7t of gold for the Chinese central bank, the highest since Q1 2025," Jia said. 

 

China's gold imports strengthened at the start of 2026, with January recording net imports of 77 tonnes, a sharp increase from net exports of 6 tonnes a year earlier, Jia said, citing latest data from China Customs. February imports rose to 96 tonnes, up 63 tonnes on year, supported by strong demand and a rebound in local gold price premiums also boosted importer interest, Jia said.  End

 

US$1 = INR 93.37

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

 

Reported by Reshma Ravi

Edited by Deepshikha Bhardwaj

 

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