Understanding China’s Gold Market Dynamics in March 2024

In March 2024, China’s gold market witnessed some intriguing trends, with significant implications for investors and market watchers. Here’s a comprehensive overview of the key developments in China’s gold market during the month, including shifts in official reserves, market demand, and investment trends.

Market Overview

March saw notable movements in the Shanghai Gold Benchmark PM (SHAUPM) and the London Bullion Market Association (LBMA) Gold Price AM. The SHAUPM, priced in RMB, surged by 10% during the month, while the LBMA Gold Price AM, in USD, increased by 8%. This robust performance has established gold as a standout among major local asset classes, closing Q1 with a 10% gain.

Despite these price increases, the wholesale gold demand experienced a slight decline. Approximately 124 tonnes of gold were withdrawn from the Shanghai Gold Exchange (SGE) in March, down 3 tonnes from February, influenced largely by the heightened gold prices which dampened demand.

Key Highlights from March 2024

Gold Prices: Both the SHAUPM and LBMA Gold Price AM saw significant rises, with the former marking the most substantial rise since August 2019 due to a weakening local currency and strong investment demand. This strong performance contributed to a 10% quarterly return for RMB gold prices, overshadowing major local assets.Chart 1: Monthly Changes of SHAUPM and LBMA Gold Price AM


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| Month     | SHAUPM Change (%) | LBMA AM Change (%) |


| March 2024| +10%              | +8%                 |


Data Source: Bloomberg, Shanghai Gold Exchange, World Gold Council

Gold Demand: The first quarter saw the highest wholesale gold demand since 2019, totaling 522 tonnes, which is 57 tonnes higher year-over-year and 43 tonnes above the ten-year average.Chart 2: Q1 Wholesale Demand Comparison


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| Year     | Q1 Gold Withdrawal (tonnes) |


| 2024     | 522                        |

| 10-Year Avg | 479                      |


Data Source: Shanghai Gold Exchange, World Gold Council

Investment Trends: Chinese gold ETFs continued to attract inflows, adding RMB 1.2 billion (approx. USD 164 million) in March, culminating in a 20% increase in total assets under management (AUM) for Q1, reaching a new high of RMB 35 billion (USD 5 billion).

Future Outlook

As we proceed into the traditional off-season for gold demand, jewelry consumption may remain subdued due to high local gold prices. However, gold’s impressive performance against other local assets is likely to sustain strong investment demand. Moreover, the People’s Bank of China (PBoC) added 5 tonnes to its gold reserves in March, continuing a 17-month streak of purchases, now totaling 2,262 tonnes, indicating robust confidence in gold’s value retention.


The dynamics of China’s gold market in March underscore the dual nature of gold as both a consumer good and a significant investment vehicle. Despite a dip in wholesale demand, strong investment flows and central bank acquisitions suggest that gold remains a key asset in China’s financial landscape. Moving forward, investors and market participants will likely keep a keen eye on these trends to gauge potential shifts in the economic and geopolitical context that could impact gold’s future demand and pricing.

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