Chinese Households Lift Gold Buying as Shanghai Volume Hits 43 Million Lots

Shanghai's Busiest Gold Week Since April

Trading volume on China's main bullion marketplace, the Shanghai Gold Exchange (SGE), hit 43 million lots on its flagship Au99.99 contract last week, roughly 430 tons of gold and the busiest week for the contract since April. The contract requires buyers to pay in full and take delivery, so the tally counts physical purchases rather than leveraged bets, a distinction that matters when judging how durable the demand is. Jinrui Futures analyst Zijie Wu said domestic demand is now “running against the price trend,” strengthening as prices fall rather than fading with them.

Most of the household buying flows through bank accumulation plans, which let individuals buy small amounts on a schedule instead of timing the market. Purchases through these plans in the first nine months of the year have passed the full-year total for 2025, and staff who run the programs at major banks said the pace picked up again last week. Central bank figures published in an April SGE report show lenders sold 2,187 tons to consumers in 2025, more than triple the 2024 amount, though the gross figure excludes metal later sold back.

The state has been buying the slide as well. The People's Bank of China (PBOC) added 740,000 ounces in September, its largest monthly purchase since October 2023, in a month when the price dropped more than 6%. The addition stretched the bank's buying streak to 23 straight months. The broader backdrop is a rough year for holders: the metal is down 7.73% since January 1.

Fed Decision and China's Slumping Alternatives

Gold fell below $4,000 on October 23, its first trade under that level since July, and earlier on Tuesday it changed hands at $3,996.96, down 0.50% on the day. The next scheduled catalyst is the Federal Reserve's rate decision on Wednesday, October 28. Justin Lin of Global X ETFs views $3,900 as the next key support test, while Bank of America has flagged a possible low near $3,750. Lin expects a softer rate outlook to help the metal in the near term, which places most of the weight on the Fed's wording this week.

The demand surge has clear domestic roots. China's stock market has lost $2.4 trillion in value since peaking in May, and the benchmark CSI 300 entered a bear market last week; Morgan Stanley expects further losses before shares find a bottom. Property remains in a prolonged slump, and China's five-year bond yield hit a record low on Tuesday after fresh central bank cash injections. With returns falling across stocks, property and bonds, savers have rotated into bullion as the remaining store of value. The trade-off is symmetrical: if Chinese equities recover, some of that money could rotate back out of gold, so the metal's hold on $4,000 depends in part on how long households keep buying the dip.

Since that earlier print, buyers have pulled the metal back above the round number: COINOTAG data shows gold at $4,047.85, up 0.93% over 24 hours, pressing the strongest resistance on our composite scoring at $4,066.28, rated 76/100. Below the market, the deepest shelf sits at $3,959.29 with a score of 85/100, a level marked by a Fibonacci retracement base and the lower Bollinger band. Momentum stays cautious, with the daily RSI at 38.8 and the trend still classified as a downtrend. Positioning is quiet: perpetual funding runs at 0.0077% with about $909.9 million in open interest. The recent dip buying has moved price toward that 76/100 resistance, and a dovish tilt from the Fed on Wednesday would be the clearest catalyst to clear it.