Chinese Gold imports hit two-year high in May

Chinese gold imports surged to the highest level in two years last month despite sagging prices and cooling demand.

According to the latest customs data, China imported 163 tonnes of gold in May. The last time we saw imports at that level was March 2024.

Since the beginning of the year, China has imported 692 tonnes of the yellow metal. That represents a 76 percent increase from the same period last year.

A new import licensing scheme went into effect on June 1. The new rules will ease some regulations on certain banks. Analysts say the surge in imports could be partly due to banks using up their existing quotas before the new system goes into effect. 

Investment buying is currently the primary driver of gold demand in China. Guangzhou Southern Gold Market Academy research analyst Song Jiangzhen told Bloomberg that demand for physical bullion bars and inflows of metal into gold accumulation plans are supporting demand. Accumulation plans, such as the monthly purchase plan at Money Metals, allow investors to buy gold incrementally with regular monthly payments.

Chinese buying helped push gold bar and coin demand to a 12-year high of 1,374.1 tonnes last year. In value terms, global bar and coin demand was a record-breaking $154 billion.

More than half of last year’s global coin and bar demand came from two countries – China and India.

The surge in Asian investment demand helped drive prices to record levels in January. It has since cooled as inflation fears and higher interest rate expectations have created headwinds for the gold market. The Shanghai Gold Benchmark Price dropped 2.7 percent last month, as yuan strength exacerbated the general downward trend in gold prices.

According to the World Gold Council, “Sustained local equity market strength diverted investor interest away from gold. And the lack of a clear gold price trend prompted some to sell their gold ETF holdings.”

Chinese ETFs reported their first outflows since August 2025 last month, and there was a 38 percent decrease in gold withdrawals from the Shanghai Gold Exchange, reflecting wholesale demand. This was generally viewed as a seasonal decline.

However, the People’s Bank of China took advantage of the lower price to add 10 tonnes of gold to its official reserves, the largest monthly increase since December 2024.

The Chinese central bank is also known to be buying a significant amount of gold off the books.