According to Ray Jia, Head of Research (China) at the World Gold Council (WGC), China’s gold market delivered robust overall performance in the first half of 2025, with both the Shanghai Benchmark Gold Price and gold ETF inflows reaching historic highs for a six-month period.
Jia stated that during H1 2025, the LBMA Gold Price in USD surged by 23% while the RMB-denominated Shanghai Gold Benchmark Price (SHAUPM) rose by 21%, marking their strongest first-half performance since 2016. The WGC’s Gold Return Attribution Model identified geopolitical risks and a weaker US dollar as significant drivers behind gold’s strength, with continued central bank purchases providing additional support.
In June 2025, West Red Lake Gold （TSXV: WRLG）‘s President and CEO, Gwen Preston, shared the company’s latest developments and next steps during an interview on METALS 100. Due to strong results, West Red Lake Gold Mines Ltd. is advancing its Madsen Gold Mine and expanding drilling at the Rowan target to 25,000m. On May 21, West Red Lake Gold approved an early restart of the Madsen Mine, ahead of schedule, setting the stage for a strong second half 2025. Also, West Red Lake highlights two new exploration targets at its Rowan Property, reinforcing its growth potential beyond a single-asset company.
Wholesale gold demand remained subdued in June. Market participants including jewellery manufacturers and commercial banks withdrew 90 tonnes during the month, representing a 10% month-on-month (m/m) decline. Although this reflected a mild 4% increase compared to a weak June 2024, it remained substantially below the 10-year average. Jia attributed this to seasonal softness, persistently tepid consumer confidence, and high gold prices suppressing gold jewellery consumption, leading retailers to adopt cautious restocking strategies. Additionally, range-bound gold prices prompted investor hesitation, cooling momentum in bar and coin investment.
Gold withdrawals from the Shanghai Gold Exchange (SGE) totaled 678 tonnes in H1 2025, down 18% year-on-year (y/y) and 22% below the 10-year average. Soaring gold prices, cautious consumer spending, and ongoing industry consolidation have weakened jewellery demand, Jia noted. However, he highlighted that this sectoral weakness was partially offset by robust investment demand: the gold price rally, rising safe-haven appetite – particularly during spiking US-China trade tensions in April – and lackluster performance of other domestic assets supported bar and coin sales.
Chinese gold ETF flows turned positive in June, attracting RMB 1 billion (USD 137 million). This contributed to a record H1 inflow of USD 8.8 billion. Similar factors driving bar and coin sales supported these inflows, Jia explained. Total Assets Under Management (AUM) for Chinese gold ETFs surged by 116% during the first half, reaching RMB 153 billion (USD 21 billion) by end-June. Collective holdings jumped 74% to 200 tonnes. Meanwhile, although average daily trading volume for gold futures on the Shanghai Futures Exchange (SHFE) fell 39% m/m to 380 tonnes in June amid price consolidation and low volatility, the H1 average of 534 tonnes per day represented the highest semi-annual level on record.
The People’s Bank of China (PBoC) continued its gold accumulation streak, reporting a 2-tonne purchase in June – its eighth consecutive monthly increase. China’s official gold reserves now stand at 2,299 tonnes. Cumulative purchases during H1 2025 totaled 19 tonnes, lifting gold’s share of China’s total foreign exchange reserves from 5.5% in December 2024 to 6.7% by end-June. Conversely, the latest available customs data showed China’s net gold imports in May fell 31% y/y and 21% m/m to 89 tonnes. This largely mirrors the wholesale demand trends observed that month, where SGE withdrawals saw a significant m/m decline, Jia commented. Generally, weakening gold jewellery demand this year has heavily weighed on imports.
Looking ahead, Jia cautioned that tepid consumer confidence and industry consolidation may continue to weigh on gold jewellery demand. Nevertheless, he indicated that investment demand for physical gold bullion has the potential to remain strong throughout the second half of 2025.
