Finance

China's Gold Market Dynamics in May: Weakening Prices, ETF Outflows, and Central Bank Accumulation

authorBy Lisa Jing

DateJun 13, 2026

Read time2 min

This report provides a comprehensive overview of China's gold market performance in May, highlighting key trends in pricing, investment flows, wholesale demand, and central bank activities. It also touches upon the seasonal outlook for the jewelry sector, offering a nuanced perspective on the market's evolving landscape.

Navigating Volatility: Understanding China's Gold Market in a Shifting Economic Climate

Gold's Price Movement in May: A Detailed Analysis

Gold experienced a notable depreciation in May. The LBMA Gold Price PM saw a 1.4% reduction, while the Shanghai Gold Benchmark Price PM (SHAUPM) decreased by 2.7%. This downturn was exacerbated by the appreciation of the Chinese Yuan, intensifying the impact on the domestic gold market.

Investment Flows: Chinese Gold ETFs Face Significant Outflows

Chinese gold exchange-traded funds (ETFs) concluded an eight-month period of net inflows, recording substantial outflows in May. A total of RMB8.2 billion was withdrawn from these funds, equivalent to an 8.3-tonne reduction in gold holdings. This shift was largely attributed to a robust performance in local equities, which diverted investor attention away from gold, coupled with an absence of clear upward trends in gold prices, diminishing its appeal as a safe-haven asset.

Wholesale Demand Hits Decade-Low as Market Weakens

The wholesale demand for gold in China reached its lowest point for May since 2010. Withdrawals from the Shanghai Gold Exchange (SGE) plummeted by 38% month-over-month. This decline was primarily driven by the softening of gold prices and a robust equity market. Additionally, the jewelry sector continued to face challenges, contributing to the overall decrease in wholesale demand. Despite these factors, the decrease in SGE withdrawals was more pronounced than the fall in local gold prices, suggesting a broader weakening of market interest.

Central Bank's Continued Accumulation: A Significant Gold Purchase

In a notable move, the People's Bank of China (PBoC) reported a 10-tonne gold acquisition in May. This marks the most substantial monthly purchase since December 2024 and extends the central bank's continuous gold buying streak to 19 consecutive months. As a result, the PBoC's total gold reserves now stand at 2,332 tonnes, representing 8.9% of the nation's total reserves. This consistent accumulation underscores the central bank's strategy to diversify its holdings and strengthen its financial stability.

Jewellery Sector Outlook: Anticipating Seasonal Recovery

The gold jewelry sector is poised for a period of stability, with seasonal patterns suggesting a potential recovery. Following a period of subdued purchasing in previous months, the industry is expected to replenish its stock. This anticipated rebound is likely to be driven by traditional seasonal demand and a potential re-evaluation of gold's value by consumers as market conditions evolve.

Finance

Alimentation Couche-Tard: Navigating Valuation, Risks, and Future Growth

Alimentation Couche-Tard (ACT:CA) is a strong company, but its current stock price reflects an overly optimistic valuation. The current P/E ratio is significantly higher than historical averages, suggesting limited potential for substantial returns unless there's exceptional growth or multiple expansion. Key concerns include potential failures in mergers and acquisitions, margin pressure, and challenges in adapting to the rise of electric vehicle charging stations, all of which could hinder future earnings. My fair value estimate remains $68 per share, emphasizing the need for a safety margin against operational and macroeconomic risks.