Editor’s Note
Gold markets saw significant momentum in September, with benchmark prices in USD and RMB surging 12% monthly. Chinese demand remained robust, as evidenced by strong physical withdrawals from the Shanghai Gold Exchange and notable inflows into local gold ETFs.
Gold continues to shine. The LBMA Gold Price PM in USD and the Shanghai Benchmark Gold Price PM (SHAUPM) in RMB both soared by 12% last month, extending year-to-date gains to levels unseen for decades.
Gold withdrawals from the Shanghai Gold Exchange (SGE) reached 118 tonnes in September, 33 tonnes higher month-on-month and 4 tonnes higher year-on-year; Q3 ended with a total withdrawal of 297 tonnes, 9 tonnes lower year-on-year.
Chinese gold ETFs saw inflows in September (RMB 4.5 billion, US$622 million), narrowing their Q3 losses, and gold futures activity on the Shanghai Futures Exchange (SHFE) improved notably.
The People’s Bank of China (PBoC) reported its 11th consecutive monthly gold purchase, adding 1.2 tonnes in September and pushing the Q3 total to 5 tonnes.
After re-stocking in September, gold jewellery retailers will likely dial back their replenishment in October, following seasonal trends. Furthermore, the gold price rally may continue to weigh on gold jewellery consumption, adding to retailer caution.
Investment demand for gold may be buoyed by the attractive gold price rally, particularly when the local equity momentum took a hit amid flaring US-China tension.
Gold’s strength continued in September. The LBMA Gold Price PM recorded its largest monthly increase since January 2012 and its strongest quarterly performance since Q1 2016. But more notably, the SHAUPM registered its strongest month on record and its second strongest quarter ever with a 14% gain—just behind Q1 2025’s 18% surge.
Having reached record highs 36 times during the first three quarters of 2025, the SHAUPM’s year-to-date return extended to 36%, to date the best year on record. The LBMA Gold Price PM jumped 43% between January and September, the best year-to-date performance since 1979. Gold’s relatively weaker return in China was mainly due to a 4% appreciation in the RMB against the dollar during the period.
It is also worth noting that the gold price has carried its bullish momentum into October, with the LBMA Gold Price PM breaching the US$4,000/oz threshold for the first time ever on 8 October and the SHAUPM surging nearly 5% during the month’s first trading day.
Wholesale gold demand saw a 33-tonne month-on-month rebound in September, reaching 118 tonnes; 4 tonnes higher year-on-year. Nonetheless, it remained 33% below the long-term average.
September usually brings a seasonal uplift from manufacturers’ new product launches and retailers’ pre-Golden Week holiday restocking. Yet this year, soaring gold prices and doubts about future sales have tempered retailers’ restocking enthusiasm.
During the first three quarters of 2025 wholesale gold demand reached 297 tonnes, a mild 3% year-on-year fall and 37% below the ten-year average. In this quarter, weakness in the gold jewellery sector outpaced investment strength.
Chinese gold ETFs finally saw inflows in September, following two consecutive monthly losses. Attracted by the strong gold price performance, Chinese investors bought RMB 4.5 billion (US$622 million) of local gold ETFs. September’s inflows and the surging price lifted Chinese gold ETFs’ total AUM to another month-end peak of RMB 169 billion (US$22 billion), with holdings rebounding by 4.9 tonnes to 194 tonnes.
But September’s inflows were not sufficient to reverse earlier losses, resulting in Q3 net outflows of RMB 3.8 billion (US$537 million) and collective holdings reduced by 5.8 tonnes during the period.
