China National Gold (SH:600916) Sou Hu Cai Jing·2025-11-08 12:06Core Insights - The third quarter of 2025 witnessed a "volume-price divergence" in the Chinese gold market, with retail gold demand tonnage hitting a 16-year low while the monetary value surged to a historical high, indicating a shift in consumer and investor attitudes towards gold [1][9]. Retail Gold Demand - Retail gold investment and consumption demand reached 152 tons in Q3 2025, a year-on-year decline of 7% and a quarter-on-quarter drop of 38%, marking the weakest performance since 2009 [1][11]. - Despite the decline in tonnage, the total monetary value of gold demand soared to 1,204 billion RMB (approximately 169 billion USD), a year-on-year increase of 29%, setting a record for Q3 [1][11]. - Gold jewelry demand was 84 tons, down 18% year-on-year but up 21% quarter-on-quarter, representing the weakest Q3 since 2007 [2][11]. - The total value of gold jewelry consumption was 665 billion RMB (approximately 93 billion USD), reflecting a 14% year-on-year increase and a 25% quarter-on-quarter increase, making it the second-highest Q3 value on record [2][11]. Investment Demand - Gold bar and coin sales reached 74 tons, a 19% year-on-year increase, although there was a 36% quarter-on-quarter decline [4][11]. - The total sales for the first three quarters amounted to 313 tons, a 24% year-on-year increase, marking the highest level since 2013 [4][26]. - The demand for gold bars and coins showed a "weak-strong" pattern throughout Q3, with a resurgence in September as gold prices rose and stock market momentum weakened [4][26]. Gold ETF Performance - In Q3, gold ETFs experienced a net outflow of 3.8 billion RMB (approximately 5.4 billion USD), ending a three-quarter inflow streak, with total holdings decreasing by 5.8 tons to 194 tons [6][30]. - Despite the outflow, the total assets under management (AUM) for gold ETFs increased by 11% to 1,688 billion RMB (approximately 237 billion USD), reaching a new monthly high [6][30]. - The cumulative inflow for gold ETFs in the first three quarters was 593 billion RMB (approximately 82 billion USD), the highest for the same period historically [6][30]. Central Bank Actions - The People's Bank of China (PBoC) continued to increase its gold reserves, adding 5 tons in Q3, bringing the total to 2,304 tons, which constitutes 7.7% of its foreign exchange reserves [7][13]. - The ongoing gold purchases by the central bank have bolstered investor confidence in the gold market [7][13]. Outlook for Q4 - The demand for gold jewelry may see seasonal improvement, but high gold prices and the later-than-usual Chinese New Year could limit growth [8][16]. - Investment demand is expected to remain strong due to geopolitical risks and ongoing central bank purchases, with potential interest rate cuts further attracting investors [8][16].