China’s Gold Demand Hits Record High Amid Volatility; Local ETF Market Trends
Despite international gold price volatility in Q1 2026, China’s demand for gold reached an all-time high, underscoring a strong preference for safe-haven assets. According to the World Gold Council, total gold investment and consumption in China surged 24% year-on-year to 362 tons, with demand for gold bullion and coins rising by 67% to 207 tons. Chinese gold ETFs attracted inflows of 58.6 billion yuan, while the People’s Bank of China added 7 tons to its reserves, reflecting both institutional and retail shifts towards diversification with gold. Globally, while total gold demand increased modestly, the total value surged 74% to $193 billion.
On the domestic front, energy-linked ETFs outperformed markedly amid a sharp rise in global oil prices. Fears of supply disruption stemming from stalled negotiations between the US and Iran pushed up WTI and Brent crude prices, boosting products like KODEX WTI Crude Oil Futures (H) and TIGER Oil Futures Enhanced (H). In contrast, inverse oil ETFs posted steep declines as oil prices rallied. Money flowed into both safe-haven and thematic ETFs, with strong performances in Chinese innovation board, oil/gas, clean energy, and hydrogen themes, while IPO/M&A, cosmetics, construction, nuclear, and steel ETFs underperformed. The KODEX Composite Bond (AA-or above) Active ETF led in fund inflows.
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