China sees solid ETF inflows and massive PBoC purchases in April amid flat price performance – WGC’s Jia  

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By Ernest Hoffman
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China sees solid ETF inflows and massive PBoC purchases in April amid flat price performance – WGC’s Jia   teaser image

(Kitco News) – While international and Chinese gold prices ended April essentially unchanged, local ETFs and the country’s central bank continued their accumulation even as wholesale demand slid, according to Ray Jia, research head for China at the World Gold Council (WGC).

In the WGC’s latest China gold market update, Jia noted that gold traded sideways in April, with the LBMA Gold Price PM up by 0.1% while the Shanghai Gold Benchmark Price PM (SHAUPM) losing 0.4%.

“Early in the month, gold rebounded from March weakness as easing Middle East tensions tempered inflation concerns and weighed on yields,” he wrote. “However, renewed uncertainty around the Strait of Hormuz later in April drove oil prices higher, dampened Fed easing expectations, and reversed gold’s earlier gains.”

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Chinese gold ETFs expanded further in April, continuing their recent strong performance.

“Chinese gold ETFs witnessed their eighth consecutive monthly inflow in April, attracting RMB3.5bn (US$498mn),” Jia said. “Following another monthly expansion their total AUM reached RMB306bn (US$45bn), 1% higher m/m. Meanwhile, collective holdings increased 3t to 301t, another month-end peak.”

“Continued global and regional geopolitical tensions during the month, as well as falling local government bond yields, sustained Chinese investor interest in gold,” he added. “Nonetheless, inflows slowed as investors may have been diverted to the rallying equity market.”

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Jia said that with the local gold price stabilizing so far in May, the World Gold Council expects to see local investors continuing to allocate to gold ETFs despite the local stock market rally.  

Meanwhile, Chinese gold futures trading activities cooled further last month, but remain strong by historical standards.

“Despite a 31% m/m decline, volumes of gold futures traded at the Shanghai Futures Exchange (SHFE) – at 307t/day – remained well above the five-year daily average of 265t,” Jia wrote. “Trader interest in gold futures weakened as amid local stock market strength and easing gold price volatility.”

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Wholesale demand also dropped amid seasonal weakness.

“Gold withdrawals from the SGE totalled 103t in April, a 23% m/m fall,” he noted. “The m/m weakness followed a seasonal pattern: restocking falls in April as gold jewellery consumption enters its traditional Q2 off-season. Although there was some replenishment ahead of the early‑May Labour Day holiday – historically a boost for jewellery sales – the impact was limited as consumer spending continues to shift toward experiences such as travel. Meanwhile, bullion sales, while still healthy, cooled from the previous buying frenzy as strong equities and the easing gold price momentum dimmed investor interest in gold.”

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On an annual basis, April wholesale demand fell 33%, but this was due in part to a particularly high comparison base, as April 2025 demand reached its highest level since 2018. “Weaker wholesale demand has, however, been evident generally this year, due mainly to the downturn in the gold jewellery sector,” he added.

Demand from the central bank, by contrast, was its strongest in nearly a year and a half in April.

“The PBoC reported an 8t gold purchase in April, its 18th consecutive monthly addition and the highest since December 2024,” Jia said. “This addition brought Chinese official gold holdings to 2,322t, 9% of the country’s total official reserves, which rose 2% to US$3.8tn.”

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And gold imports saw a strong rebound in March and in Q1 as a whole.

“China imported 143t of gold on a net basis in March, a notable 49% m/m rise,” Jia wrote. “The March rebound brought Q1 net gold imports to 316t, surging both q/q (+182%) and y/y (+333%).”

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He added that the import numbers reflected robust Chinese gold consumption during Q1, with strong bullion investment offsetting weak jewelry buying. “Meanwhile, positive local gold price spread throughout the quarter also encouraged importers.”

Looking ahead, Jia cautioned that the World Gold Council expects consumer demand for the yellow metal to remain weak through the traditional off season for gold jewelry, “though the stabilising gold price may offer some support; meanwhile, rising interest from local investors in the equity market rally – which started in early April – and the lack of a clear trend in the gold price may continue to discourage bullion investment.”

Kitco Media

Ernest Hoffman

Ernest Hoffman is a Crypto and Market Reporter for Kitco News. He has over 15 years of experience as a writer, editor, broadcaster and producer for media, educational and cultural organizations. Ernest began working in market news in 2007, establishing the broadcast division of CEP News in Montreal, Canada, where he developed the fastest web-based audio news service in the world and produced economic news videos in partnership with MSN and the TMX. He has a Bachelor's degree Specialization in Journalism from Concordia University. You can reach Ernest at 1-514-670-1339.

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