China’s Hidden Gold Game Revealed: Central Bank Purchases Double, Jewelry Demand Falls, Investment Surges

New Delhi, 30 August 2025:
A recent report by Deutsche Bank, released on 26 August 2025, has shed light on what it calls China’s “hidden gold game.” Over the past four years, gold has repeatedly outperformed other financial assets. The main driver? Official demand—purchases by central banks and sovereign wealth funds, which have doubled since 2021.

Key Findings from the Report

Central Bank Purchases: Worldwide central banks have bought over 1,000 tonnes of gold annually during 2022‑24, reaching record levels in 2024.

China’s Contribution: The People’s Bank of China added 5 tonnes in November 2024, 10 tonnes in December 2024, and about 6 tonnes in Q2 2025, bringing China’s year-to-date total to 19 tonnes.

Investment Demand: Gold ETFs and other investment channels have surged, with Q1 2025 investment demand reaching 552 tonnes, up 170% year-on-year, marking the highest since Q1 2022.

Jewelry Demand Declines: High gold prices have suppressed consumer demand for jewelry, which has fallen to its lowest levels since the COVID-19 pandemic.

Why It Matters

The Deutsche Bank report highlights a structural shift in the gold market: while consumer jewelry demand is falling due to high prices, official and institutional demand is soaring, reinforcing gold’s role as a strategic investment. This trend is expected to support global gold prices and influence financial markets.