China’s gold market remained relatively stable in July, but underlying demand signals stayed mixed, according to the World Gold Council. While the People’s Bank of China continued to add to its holdings, domestic gold ETFs posted outflows, futures activity cooled, and first-half imports fell to their lowest level since 2021.
Prices stayed firm as yuan gold extended gains
The WGC said the LBMA Gold Price PM in U.S. dollars rose 0.3% in July, while Shanghai’s benchmark gold price PM in yuan gained 0.5%. Helped by yuan weakness against the dollar, yuan-denominated gold has climbed more than 22% so far this year. Even so, firm prices did not translate into a broad recovery in physical demand.
Withdrawals from the Shanghai Gold Exchange edged up to 93 tonnes in July, increasing by 3 tonnes from June and 4 tonnes from a year earlier. The rebound was modest and seasonal, and volumes remained well below the 10-year average. The data suggests that jewelry demand continues to struggle under record-high local gold prices.
ETF outflows and slower futures trading
Investment demand softened during the month. Chinese gold ETFs saw net outflows of RMB 2.4 billion (about $325 million) in July. Total assets under management slipped 1% to RMB 151 billion (around $21 billion), while combined holdings fell by 3 tonnes to 197 tonnes. The WGC linked the outflows to improved investor risk appetite after stronger-than-expected second-quarter GDP data and solid equity market performance.
Trading in gold futures on the Shanghai Futures Exchange also lost momentum. Average daily volume came in at 242 tonnes, down 18% from the previous month. Still, that figure remained above the five-year average of 216 tonnes a day. Lower price volatility appeared to reduce trader interest during the period.
PBOC keeps buying as imports weaken sharply
On the official side, the PBOC added 2 tonnes of gold in July, marking its ninth straight monthly purchase. China’s official gold reserves now stand at 2,300 tonnes, equal to 6.8% of total foreign reserves. Year to date, the central bank has added 21 tonnes.
Imports told a much weaker story. China’s gold imports fell to 50 tonnes in June, a 45% drop from the previous month. For the first half of 2025, total imports plunged 62% year over year to 323 tonnes, the weakest first-half level since 2021. The WGC said subdued wholesale demand remained the main drag.
Overall, the latest data points to a divided market: official reserve accumulation continues, but softer consumer demand, ETF outflows, and weaker imports suggest that high prices are still weighing on broader market activity.