China's Gold Imports Soar to Two-Year High Amid Trade Surplus

China's gold imports surged to a two-year high in June, with the country buying about 173 tons of gold worth around $23 billion. This marked the third consecutive monthly increase in overseas purchases and came despite a slump in international prices.

The jump in gold imports was driven by cheaper prices and a firmer yuan, which kept buyers engaged even as global gold corrected. Banks were also motivated to use up their import quotas and stock up on bullion to meet retail commitments.

China's record monthly trade surplus of $125.6 billion played a role in the increased gold imports, with gold alone absorbing nearly a fifth of the surplus. The country's June surplus was up from $105.4 billion in May, with exports riding an AI-driven demand wave even as the domestic economy remained soft.

The trend has sparked interest among investors, who are watching the steady conversion of China's trade surplus into physical metal. Some argue that this points to a higher and more durable floor for gold prices, driven by central bank diversification away from dollar weighting.