PBoC Buying Spree Fuels Chinese Gold Demand Amid Wholesale Softness

Chinese gold demand in July 2026 was complex and multifaceted. The country's gold market is driven by three distinct channels: official-sector accumulation, private investment demand, and jewellery consumption.

The People's Bank of China (PBoC) continued its buying streak, adding around 20 tonnes to its gold holdings in July, bringing the total to 21 consecutive months. This represents one of the most consistent and consequential accumulation programmes by any central bank in the current cycle, with significant implications for global supply and prices.

While wholesale physical demand softened, institutional buying through futures and funds climbed. Chinese gold-backed ETFs recorded net inflows of around US$744 million in July, with total holdings rising by 5 tonnes to 282 tonnes. This shift towards financial gold instruments suggests China's gold investment market is maturing.

The jewellery sector remained under pressure due to elevated prices, which made discretionary purchases more difficult, especially in lower-tier cities where income growth has moderated. Analysts remain divided on whether the weakness is temporary or more structural.