China's Gold Hoard Fuels Global Market Stability

Western gold demand has been sluggish in recent months, capping price gains. However, Asian appetite, led by China, remains a critical support for the global market.

BMO Capital Markets notes that China's stockpile and sway potentially far exceed earlier estimates.

The nation's central bank purchased 15 tonnes of gold last month, its largest monthly acquisition since October 2023. China's official gold reserves have increased by just over 40 tonnes so far this year.

According to BMO's analysis, China has amassed roughly 30,000 tonnes of gold above ground, a figure higher than official records, and now drives about one-third of global demand flows.

The bank expects rising Chinese demand to be the main catalyst pushing gold prices higher in the second half of this year. Even with its massive unreported holdings, China's hunger for gold is likely to remain insatiable for the foreseeable future, eventually overtaking U.S. reserves.