Why Is the Price of Gold Increasing in China?

Gold and silver prices increased through much of 2025. The importation and buying of physical precious metals in the People’s Republic of China (PRC) is one of the drivers of this price spike. Like everywhere else in the world, Chinese investors see gold as a safe-haven asset. During times of economic uncertainty, it is an attractive investment because it holds value better than paper money and securities.

Actually, the answer to the question "why is the gold price increasing in China?" is more complicated than the worry about global and domestic markets. There are a lot of other reasons for the gold price increase and rising demand.

Why is the gold market in China important for someone investing in gold in Canada? China is a large market, and it imports some of its metals through Hong Kong. High demand in the country can increase the spot price around the world.

Here is a closer look at why the price of gold is increasing in China and how it affects how you buy coins and bars in other parts of the world.

Why is China Importing More Gold?

Precious metal imports into China doubled between October and November. Several different factors caused this increase.

Central Bank Gold Reserves

China has been expanding its gold reserves in its central bank. This is part of a trend of central banks around the world buying more gold. China is being even more aggressive with its official gold buying compared to other nations.

Why? A lot of the central bank's (known as the People's Bank of China) wealth has been in U.S. dollars and U.S. treasury bonds. Uncertainty about U.S.-PRC relations and questions about the long-term prospects of the U.S. economy and the U.S. dollar inspired the country to diversify. Replacing U.S.-based assets with something more stable is a safe way to expand the bank's portfolio.

Demand from Investors

It's not just the central bank looking to diversify. Chinese investors, both individual investors and financial firms, want to hedge against uncertainty. This means buying physical metals, gold futures, and ETFs. In addition to worries about U.S.-PRC relations affecting trade, there are worries in the domestic market. Some investors are worried about the stability of the property and stock markets.

Higher Demand for Silver

Demand for silver is also increasing in China. This is because of its industrial demand. Many of the electronic products, such as solar panels and mobile devices, use silver. The huge demand for these products has caused silver prices to rise.

Even so, the price of silver in China is affected by more complex factors. The country produces a lot of silver. But tariffs from the U.S. and export restrictions have caused uncertainty. This has created more volatility in silver markets.

It's also harder to tell about silver, because central banks don't have the same type of reporting for silver as for gold. The extra uncertainty can add to the volatility. At the same time, industrial demand can cause silver to increase in value even more than other metals.

Is China Hoarding Gold?

The PRC’s official gold reserves have increased steadily. The central bank currently has 74.12 million troy ounces in its vaults. This figure has increased each month for the past 13 months. Again, the reason for doing this is to move away from the U.S. dollar.

However, even with these new investments, the PRC is not the biggest gold holder in the world. The Fed (the U.S. central bank) remains the biggest investor in terms of value and overall weight. Germany, France, Italy, and Russia also have more gold than the PRC (as of Q3, 2025).

The PRC has been steadily increasing its reserves, which shows a long-term goal of being a bigger player in precious metal markets. However, it won't overtake these other nations in the short term.

The Retail Market in China

China has more of an impact on retail jewelry markets. The country (511 metric tonnes of gold jewelry sales) was second only to India (563 tonnes) according to 2024 sales data. In contrast, the U.S. had 132 tonnes of sales in 2024.

What Does This Mean for Canadian Buyers?

Whether Canadian buyers are purchasing a gift or buying gold as an investment, the Chinese market can affect prices. This is even the case if Canadians aren't buying coins or bars from the PRC.

Why? Precious metals have a global market, and China is one of the biggest participants. When demand rises there, it impacts prices all around the world. More supply gets directed to China to meet the demand, so there is less for other countries.

Remember that the spot price is a worldwide figure. Dealers in Canada, the U.S., and China will use it as their base price. They will then add the premium to this to arrive at the sales price for coins, bars, and jewelry.

This is why Canadian investors, collectors, and gift buyers need to be aware of what is happening in precious metals markets in other countries.

Gold and Silver from Sprott Money

Investors in Canada may have the same motivations as their Chinese peers to buy precious metals. They want to avoid investments tied to the U.S. dollar and get valuable items that can withstand economic problems and uncertainty.

Sprott Money is a source for bullion. Our products meet purity standards. They come from government mints like the Royal Canadian Mint. We also have a selection from reputable private mints, such as the Scottsdale Mint.

We also provide storage solutions for your portfolio, and we have a clear and well-established process for buying gold and silver. With major global markets like China having a bigger impact on spot prices, it's important to be able to react quickly. An all-in-one solution like Sprott Money makes it possible to buy, sell, and store precious metals without any hassle.

Visit Sprott Money to see our gold, silver, and platinum offerings and to learn more about our other services.