Key Takeaways
Three separate parts of the global financial system moved toward gold in the same week: central bank reserves, Chinese capital markets, and Western bullion-clearing infrastructure.
China's central bank added 15 tonnes of gold to reserves in June, the biggest monthly increase since October 2023, even as spot gold tumbled 11.65% in its worst month since 2008. The People's Bank of China now holds 75.44 million fine troy ounces (2,331 tonnes), according to data released Tuesday, marking its 20th consecutive month of purchases. The value of China's gold reserves fell to $303.72 billion from $340.75 billion in May, reflecting the price decline.
"Central banks are buying gold for reserve diversification and as a hedge against geopolitical risk," said Krishan Gopaul, senior analyst at the World Gold Council, in a statement accompanying the WGC's May data. "The trend shows no sign of slowing."
The buying extends well beyond China. Central banks globally added a net 41 tonnes in May, the second-highest monthly total this year, the WGC reported. Poland led with 18 tonnes, bringing its 2026 total to 64 tonnes and reserves to 614 tonnes as it targets 700. Uzbekistan added 33 tonnes year-to-date, and gold now makes up 87% of its total reserves. Singapore returned as a net buyer for the first time since September 2025, adding 4 tonnes. The WGC's annual survey found 89% of central bankers expect global gold reserves to rise over the next year, with a record 45% expecting their own institution's reserves to increase.
China's ETF market flips to gold
The shift is not limited to official reserves. The Huaan Yifu Gold ETF overtook the Huatai-PineBridge CSI 300 ETF to become China's largest exchange-traded fund of any kind, with about 90 billion yuan ($12.4 billion) in assets versus the CSI 300 fund's 83 billion yuan, according to Bloomberg data. A gold fund now sits atop a market long dominated by broad equity benchmarks.
The flip carries particular weight in China's capital-controlled environment. With the property market still impaired, bank deposit yields near historic lows, and domestic equities struggling to rebuild confidence after years of state-linked support, a liquid gold ETF offers Chinese investors a hedge against currency weakness and policy uncertainty without requiring offshore diversification. The shift comes as Beijing's so-called "national team" appears to be reducing its support of state-linked equity funds that have repeatedly stepped in during periods of market stress.
Citi joins London gold clearing
The third signal landed in bullion-market infrastructure. Citi was admitted as a clearing member of the London Precious Metals Clearing Limited network, joining HSBC, ICBC Standard Bank, JPMorgan and UBS as the fifth bank authorized to clear transactions in the world's largest over-the-counter gold market, worth roughly $160 billion a day. It is the first new entrant to the clearing group in a decade.
"The addition of Citi as a clearing member demonstrates the openness and transparency of our membership process," said James Cressy, chair of LPMCL, in a statement.
Taken together, the three developments describe a structural rotation rather than a tactical trade. Sovereign reserve managers, Chinese private capital, and global bullion-market infrastructure are all moving toward gold simultaneously. Gold futures on COMEX traded at $4,713.30/oz, up 3.84%, as of the latest session, while silver futures rose 7.54% to $75.48/oz. Deutsche Bank has forecast gold reaching $8,000/oz by 2031.
This article is for informational purposes only and does not constitute investment advice.
