China gold demand at decade low: WGC signals price and project risks for miners
Reviewed by Joe Ashwell
First reported on MINING.com
30 Second Briefing
China’s physical gold demand stayed near decade lows in June, with Shanghai Gold Exchange withdrawals at 87 tonnes, up 36% on May but still 27% below the 10-year average for H1 2026 as total withdrawals reached 598 tonnes. Jewellery demand weakness is keeping manufacturers from rebuilding inventories even as the gold price holds around $4,013/oz, roughly 8% lower year-to-date. In contrast, the People’s Bank of China added 15 tonnes in June, lifting reserves to 2,346 tonnes, while domestic gold ETFs saw record monthly outflows of RMB 15 billion and a 17-tonne holdings drop to 277 tonnes.
Technical Brief
- June’s 36% month-on-month rise in SGE withdrawals followed the weakest May in 16 years.
- World Gold Council characterises June wholesale demand as “close to the lowest level” of the past decade.
- Manufacturers and retailers reportedly delayed restocking due to “sustained weakness” in jewellery consumption, constraining wholesale flows.
- People’s Bank of China’s 15-tonne June purchase is its largest monthly addition since October 2023.
- Central bank has now extended its gold-buying streak to 20 consecutive months, totalling 82 tonnes added.
- PBoC also booked a 40-tonne increase in gold holdings during H1 2026 amid price volatility.
- Chinese gold ETF redemptions of RMB 15 billion in June mark the worst outflow month on record.
- ETF holdings fell 17 tonnes to 277 tonnes, cutting AUM 16% to RMB 243 billion, the lowest since December 2025.
- Despite the June outflow, H1 2026 remains the second-strongest first half on record for Chinese gold ETF demand at 29 tonnes.
Our Take
The World Gold Council’s data here on weak Chinese offtake contrasts with its February work in our database highlighting record central bank accumulation, underlining that bullion support is increasingly coming from official-sector buying rather than jewellery or retail investment demand in China.
Russia’s claim in June to be outproducing China in gold, flagged in another WGC-referenced piece in our database, means that a sustained demand lull in China could shift bargaining power towards alternative large buyers such as the Middle East and other central banks if Chinese fabrication and investment demand stay below the 10‑year average.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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