China's Gold Rush Continues as Fed Hawks Keep Prices in Check
Chinese gold imports have reached an impressive milestone, surpassing 1,000 tonnes through August this year. This is a significant increase from the same period last year and marks a strong demand for physical metal in the country.
The central banks of Poland and China were major contributors to the growth in reserve managers' purchases, adding 288.9 tonnes to their reserves in the second quarter of 2026. The World Gold Council reports that this is a 62% jump from the same period last year and the strongest second quarter on record.
Exchange-traded funds (ETFs) have also seen significant inflows, with the SPDR Gold Shares taking in around $560 million in recent months. Globally, gold-backed ETFs attracted $18 billion in August alone, swelling worldwide holdings by 121 tonnes.
However, despite the strong physical demand, spot gold prices remain under pressure due to rising US Treasury yields and a stronger dollar. Hawkish remarks from Federal Reserve officials have pushed traders to price in additional tightening, making it more expensive to hold non-yielding assets like bullion.