Chinese households are buying more gold as prices fall, lending the metal support as it slips below $4,000. Weekly volume on a key Shanghai contract just hit its highest level since April.
The buying arrives when gold holders could use it. The metal has lost 7.73% since January 1 and faces a Federal Reserve rate decision on Wednesday.
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Cheaper Gold Draws a Bigger Crowd in Shanghai
On the Shanghai Gold Exchange (SGE), China’s main bullion marketplace, the Au99.99 contract traded 43 million lots last week. That equals roughly 430 tons and marked its busiest week since April, Bloomberg reported.
Buyers must pay in full and take delivery, so the volume reflects physical purchases rather than leveraged bets. Jinrui Futures analyst Zijie Wu said local demand now moves against prices.
“Domestic gold demand is increasingly running against the price trend, strengthening as prices fall,” Wu said.
Much of the buying runs through bank accumulation plans, which let individuals buy gold in small amounts over time.
Purchases through these plans in the first nine months have reportedly passed the 2025 total. People who run them at major banks added that buying sped up last week.
Central bank figures in an April SGE report show lenders sold 2,187 tons to consumers in 2025. That was more than triple the 2024 amount, though the gross figure excludes gold later sold back.
China’s central bank has been buying through the slide as well. The People’s Bank of China (PBOC) added 740,000 ounces of gold in September, its largest purchase since October 2023.
That buying landed in a month when gold fell more than 6%. It also extended the central bank’s streak to 23 straight months.
China’s Stock Slump Sends Savers Toward the Bullion Counter
Weak returns at home may help explain rising Chinese gold demand. China’s stock market has lost $2.4 trillion in value since peaking in May.
The benchmark CSI 300 entered a bear market last week. Morgan Stanley expects more losses before Chinese shares find a bottom.
Property remains in a slump, and China’s 5-year bond yield hit a record low on Tuesday. With returns falling across stocks, property, and bonds, Chinese savers have turned to gold as a safe haven.
Gold Slips Under $4,000 Again as the Fed Decision Nears
At press time, gold traded at $3,996.96, down 0.50% on the day. It fell below $4,000 on October 23, its first trade under that level since July.
Justin Lin of Global X ETFs sees $3,900 as the next key test. Bank of America has flagged a possible $3,750 low.
Lin expects a softer rate outlook to help gold near term, putting weight on Wednesday’s Fed decision.
If Chinese stocks recover, some of that money could rotate back out of gold. Until then, gold’s hold on $4,000 may partly depend on how long Chinese households keep buying the dip.
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