According to World Gold Council research head Ray Jia, gold prices in China faced downward pressure throughout May. The Shanghai Gold Benchmark Price fell 2.7%, a decline exacerbated by a strengthening renminbi. This price instability, coupled with a lack of clear upward momentum, prompted investors to liquidate $1.2 billion in gold ETFs, reducing total assets under management by 5% to 43 billion dollars.

Wholesale demand suffered even more pronounced losses. Withdrawals from the Shanghai Gold Exchange totaled 64 tonnes, marking the weakest May for the market since 2010. Jewellers remained hesitant to restock inventories, citing persistent affordability issues and tax burdens. Meanwhile, the People’s Bank of China utilized the price dip to bolster its reserves, adding 10 tonnes to its holdings in May. This 19th consecutive month of state-led purchasing brings the central bank’s total official hoard to 2,332 tonnes, now representing nearly 9% of the nation’s foreign exchange reserves.