China's central bank kept buying gold through a bruising first half even as prices fell and physical demand stayed soft. The PBoC reported a 15-tonne purchase in June — its largest since October 2023 — while a weak June wiped out gold's earlier 2026 gains.
China's central bank extended its gold-buying streak to 20 straight months in June, adding 15 tonnes — the largest monthly purchase since October 2023. The addition lifted China's official gold reserves to 2,346 tonnes, or 8% of total foreign exchange assets. Across the first half the People's Bank of China accumulated a 40-tonne increase in official holdings despite gold's price swings.
That steady official appetite stood apart from a rough six months for prices. Both the LBMA Gold Price PM and the Shanghai Benchmark Gold Price PM fell 11% in June, erasing gold's earlier gains and leaving H1 in the red. The international gold price in USD dropped 8% over the half, while the RMB gold price fell 10% as a stronger Chinese currency amplified local weakness.
June's slide hit ETFs and physical demand
Chinese gold ETFs lost RMB15bn (US$2.2bn) in June, the worst month on record, dragging total assets under management down 16% to RMB243bn (US$36bn). Even so, H1 inflows reached RMB40bn (US$5.6bn), the second strongest first half on record, as demand held up amid growing geopolitical and economic uncertainties.
Wholesale demand rebounded but stayed thin. Gold withdrawals from the SGE rose 36% month-on-month to 87 tonnes in June, helped by opportunistic restocking across the supply chain. That buying picked up as the price of gold dropped, drawing retail bar and coin investors in on the dip. Yet H1 withdrawals of 598 tonnes came in 27% below the ten-year average amid persistent weakness in jewellery.
Prices steady as dollar rally pauses
Gold has since found footing. On Tuesday it climbed back above $4,030 after touching a near two-week low, as the dollar paused following a two-day rally. Traders stayed cautious ahead of U.S. CPI data and Fed Chair Kevin Warsh's testimony, with rising U.S.-Iran tensions and expectations for more rate hikes still supporting the greenback.
Those same forces shaped the first half. Warsh's remarks at last month's policy meeting were read as hawkish, pushing up real yields and the dollar and prompting investors to reduce gold ETF holdings. The World Gold Council named rising opportunity costs and cooling momentum as the two major factors denting gold in June.
Sources: World Gold Council, TradingPedia
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