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Total Metals Corp. is focused on advancing high-grade gold projects to production.
A sharp sell-off in gold prices during March did little to deter Chinese investors, who instead viewed the decline as a prime buying opportunity and poured into the market at a record-breaking pace. According to the latest quarterly update from the World Gold Council (WGC), the price drop carved out a “golden pit” that triggered an unprecedented wave of capital inflows.
Data from WGC China Research Head Ray Jia shows that Chinese gold ETFs have now seen net inflows for seven consecutive months. In March alone, despite the rapid decline in the local gold price, funds bucked the trend with net additions of RMB 12 billion (approx. USD 1.7 billion), boosting holdings by 8.4 tonnes.
The first quarter’s performance was even more staggering. Over the first three months of the year, Chinese investors channeled a combined RMB 59 billion (approx. USD 8.5 billion) into gold ETFs, representing a 50-tonne increase in physical backing. This volume surpasses the all-time record set just one quarter earlier, marking the strongest quarter of inflows ever recorded for China’s gold ETF market.
“The plummeting local gold price did not interrupt Chinese investor appetite,” Jia noted. He attributed the robust demand to a combination of factors: a 6% decline in the CSI 300 stock index, a modest 0.8% depreciation of the yuan against the dollar, and heightened safe-haven demand spurred by escalating geopolitical tensions in the Middle East. Crucially, rather than panic selling during the first half of the month, investors engaged in aggressive dip-buying. By quarter-end, total assets under management (AUM) in Chinese gold ETFs had swelled 26% to RMB 304 billion (USD 44 billion), with total holdings reaching a record 298 tonnes.
While investment demand surged, the wholesale physical market also seized the lower price environment. Withdrawals from the Shanghai Gold Exchange (SGE) reached 134 tonnes in March, a sharp 57% rebound month-on-month and a 12% increase year-on-year. Jia explained that while this was partly driven by seasonal post-Chinese New Year restocking and a higher number of working days, the price correction “encouraged opportunistic replenishment” by manufacturers and retailers. However, broader jewelry consumption remained subdued under the weight of high prices, leaving Q1 wholesale demand 23% below the ten-year average.
The People’s Bank of China (PBoC) likewise capitalized on the discount. The central bank announced a 5-tonne addition to its gold reserves in March—its 17th consecutive monthly purchase and the largest single-month increase since February 2025. Total official gold holdings now stand at 2,313 tonnes. The central bank’s steady accumulation throughout Q1, totaling 7 tonnes, underscores its long-term commitment to reserve diversification even as the market corrects.
Looking ahead to the second quarter, Jia cautioned that the summer months typically represent an off-season for jewelry consumption, though a stabilization in prices could unlock pent-up physical demand. Meanwhile, investment flows are expected to remain resilient amid falling local bond yields and a scarcity of attractive alternative assets in China. That said, the future path of the gold price will remain the decisive variable for investor behavior in the months ahead.
