It appears the Chinese have hopped back on the gold bandwagon.
Gold demand sagged in China over the summer and into the fall months, but it appears that trend reveresed in November with net imports from Hong Kong more than doubling.
There was also a return to gold price premiums in China, another signal of growing demand for the yellow metal.
China ranks as the world’s number one gold consumer.
China imported a net of 33.1 tonnes of gold in November. That was a 115 percent increase from October and was the highest level of net imports since April 2024.
In another sign that Chinese gold demand is on the rebound, gold exports from Switzerland rose in November. Analysts say increasing demand from China, as well as India, accounted for the increase.
Gold also began selling at a premium in China as 2024 came to an end. Gold prices rose to around $4.40 per ounce above the global benchmark in late December after months of discounts. It was the first significant premium since August. In October, discounts were as much as $40 an ounce.
Analysts say record gold prices in the fall dampened Chinese demand. With prices moderating late in the year, the Chinese have apparently returned to the table.
“This shows evidence that Chinese buyers are extremely price sensitive and that the rising prices were causing buyers to be cautious in case of a price correction,” InvestingHaven.com precious metals specialist Levi Donohoe wrote.
The drop in gold global prices coincides with the runup to the Chinese New Year on Jan. 29.
“It is possible that Chinese investors are seeing the recent dip in prices as a ‘less risky’ time to buy. As demand recovers, so does the price premium,” Donohoe said.
Worries about a trade war as Donald Trump prepares to take the U.S. presidency could also be driving safe-haven gold buying in China.
“Trump has a history of applying tariffs on Chinese imports and has been vocal about his intentions to use these again in his upcoming term. Whilst this will not impact the flows of gold into China, it increases the uncertainty of the Chinese economy going forward, which will naturally cause some to want more exposure to the safe haven asset,” Donohoe said.
The People’s Bank of China also began officially adding gold to its reserves in November, with a 5-ton purchase.
China was the biggest central bank gold buyer in 2023, but it stopped announcing increases to its reserves back in May.
But even with the official pause, the Chinese have still been stockpiling gold. According to Jan Nieuwenhuijs, the PBoC’s "unreported" purchases in London accounted for 60 tonnes in September and another 55 tonnes in October.
“Chinese authorities see a greater role for gold in the future international monetary system, or they wouldn’t continue buying such extraordinary amounts of gold. Via London alone, the PBoC has stockpiled 1,000 tonnes of gold since Russia’s foreign exchange assets were ‘frozen’ by the West in early 2022,” Nieuwenhuijs wrote.
Donohoe called the revival of Chinese gold demand a bullish signal for the global market.
“Rising Chinese premiums could indicate a recovery in demand, supporting higher global gold prices in the near term. Chinese investors are thought of as shrewd buyers and so if they are seeing the recent dip in gold prices as a buying opportunity, this may become a wider trend in the global economy which provides fundamental justification for our long-term bullish view on the precious metal.”
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