Key Takeaways:
China imported 173 tonnes of gold in June, the most in two years, as lower prices spurred buying in the world's largest bullion market.
"Investors buying the dip is an important driver of recent demand," Zijie Wu, an analyst at Jinrui Futures, said. "Commercial banks need to build up their inventories to provide the physical backing for retail bullion sales and gold accumulation plans."
Overseas purchases rose for a third consecutive month, according to customs data, surpassing May's 163 tonnes and marking the highest since March 2024. In the first five months of 2026, imports surged about 76% from a year earlier. A stronger renminbi and a new licensing regime from June 1 that encouraged banks to exhaust existing quotas also contributed to the increase.
The buying spree highlights China's role as a price floor for gold, with strong physical demand emerging whenever prices retreat. Bullion-backed exchange-traded funds have attracted net inflows of about 28 tonnes this year, according to Shanghai Gold Exchange data, while the People's Bank of China extended its reserve accumulation streak to 20 months, with official holdings reaching 2,346 tonnes in June.
The domestic premium on gold that persisted for most of the first half meant it was cheaper for banks to procure bullion from the international market, Wu said. Some banks may have booked shipments before June, but the gold would not have registered until later due to the time required for financing, transportation and customs paperwork.
Reserves Hit 2,346 Tonnes as PBoC Extends Buying Streak
China's official gold reserves have risen for 20 consecutive months, reaching 2,346 tonnes in June, according to People's Bank of China data. The central bank's sustained accumulation, alongside strong retail and institutional demand, indicates that Chinese buyers view current price levels as attractive for building exposure.
Gold accumulation plans, offered by numerous Chinese banks, allow individuals to purchase bullion in small increments and represent one of the main channels for retail investors to gain exposure. The combination of central bank buying, ETF inflows and retail accumulation plans has created a broad-based demand base that tends to strengthen when international prices decline.
The sustained import momentum suggests Chinese demand could continue to provide support for gold prices in the second half of 2026, particularly if international prices remain under pressure from a stronger dollar or higher real yields. Any further price weakness would likely trigger additional dip-buying from Chinese banks and investors, reinforcing the market's perception of China as the marginal buyer at lower levels.
This article is for informational purposes only and does not constitute investment advice.
