Chinese Gold Demand Rebounded in September

Chinese wholesale gold demand rebounded significantly in September, driven by renewed investor interest despite record-setting prices and persistent weakness in jewelry sales. The LBMA gold price recorded its largest monthly increase since 2012, contributing to a 43% year-to-date gain through Q3, while the Shanghai Gold Benchmark Price (SHAUPM) surged 36% year-to-date, marking its best year on record. This September resurgence, characterized by inflows into gold ETFs and a 70% jump in futures trading volumes, signals robust investor confidence in gold's continued appreciation, offsetting a 3% year-on-year decline in overall wholesale demand for the first three quarters.

Analysis

Chinese wholesale gold demand rebounded significantly in September, reaching 118 tonnes, a 33-tonne month-on-month increase and 4 tonnes higher year-on-year. This resurgence occurred amidst record-setting gold prices, with the LBMA gold price surging 43% year-to-date through Q3 2025, marking its best performance since 1979. The Shanghai Gold Benchmark Price (SHAUPM) also achieved a record year-to-date gain of 36%, despite a 4% RMB appreciation against the USD which tempered its relative performance.

Despite the overall rebound, a clear divergence exists between investment demand and jewelry sales. Higher gold prices continue to create headwinds for Chinese gold jewelry sales, which remain approximately 33% below the long-term average, a trend the World Gold Council expects to persist. Conversely, investor interest reignited in September, offsetting earlier Q3 weakness driven by improved risk appetite and a strong 18% Q3 rally in the CSI300 Stock Index.

This renewed investor interest is evident in several metrics: Chinese gold bar and coin sales rebounded in September, following a 44% year-on-year growth in H1. Gold ETFs saw positive inflows of 4.9 tonnes, contributing to a new month-end AUM peak of ¥169 billion ($22 billion). Furthermore, gold futures trading volumes on the Shanghai Futures Exchange jumped 70% month-on-month, indicating robust speculative and hedging activity.

Key Decisions for Investors

• Investors should closely monitor the sustainability of Chinese gold investment demand, especially given the persistent weakness in jewelry sales and potential for profit-taking at current record price levels.
• Consider strategic allocations to gold-backed instruments (e.g., GLD, AAAU) to capture potential upside from continued investor interest, while acknowledging currency impacts on local returns.
• Evaluate the evolving relationship between Chinese equity market performance (e.g., ASHR, CHAU) and gold flows, as a sustained risk-on sentiment in equities could temper future safe-haven demand for gold.
• Pay attention to upcoming World Gold Council data on Chinese jewelry sales and retailer restocking, as these will indicate broader consumer demand trends beyond investment flows.