Chinese Gold Imports Surge to Two-Year High as Prices Dip

China's gold imports surged to a two-year high in June as lower prices sparked renewed demand. According to customs data, China imported 173 tonnes of gold last month, exceeding the previous record set in March 2024.

This increase follows gold imports of 151 tonnes in May and 157 tonnes in April, signaling a rebound in demand after a decline earlier this year. The international gold price dipped by 7 percent in H1, while the price was down 10 percent in renminbi terms due to yuan strength.

Jinrui Futures Company analyst Zijie Wu stated that investors buying the price dip were 'an important driver of recent demand.' Chinese banks are also motivated to use up import quotas and stock up on bullion, as commercial banks need physical backing for retail sales and gold accumulation plans. Additionally, a new import licensing regime went into effect June 1, incentivizing importers to exhaust existing quotas.

Despite the surge in imports, wholesale gold demand remains weak due to ongoing weakness in the jewelry sector. Gold withdrawals from the Shanghai Gold Exchange (SGE) rose 36 percent month-on-month to 87 tonnes in June, primarily driven by opportunistic restocking across the supply chain and healthy coin and bar investment.