(Mike Maharrey, Money Metals News Service) There’s plenty of selling in the gold market right now.
Rising yields and expectations of further Federal Reserve rate hikes have put significant pressure on gold, driving the price down to around $4,000 per ounce.
However, despite sustained headwinds over the last several months, the yellow metal has held that $4,000 support.
That means somebody is buying gold.
Who?
Chinese households are buying the dips.
I picked up this trend simply by watching daily price movements. Virtually every day, gold prices spike when Asian markets open, as investors take advantage of falling prices during Western trading hours.
Jinrui Futures Co. analyst Zijie Wu said lower prices are “attractive entry points for long-term investors.”
“Domestic gold demand is increasingly running against the price trend, strengthening as prices fall.”
Bloomberg noted that a popular contract on the Shanghai Gold Exchange (AU99.99) reported a 43 million-lot volume jump last week, representing about 430 tonnes of gold. It was the highest level since April. This contract requires full payment and mandatory delivery, so it reflects physical demand, not leveraged bets.
Analysts say many Chinese investors are slowly building their gold holdings through accumulation plans that allow them to buy small amounts of gold on a recurring basis. According to Bloomberg, purchases through these accumulation plans had already exceeded last year’s total through the first nine months of 2026.
Officials who asked for anonymity because the numbers aren’t public said buying picked up further last week as prices eased.
Chinese investors are turning to gold as a safe haven. Chinese stocks have lost $2.4 trillion since their May peak. Property values are slumping, and government bond returns have hit a record low.
Bloomberg asserts that Chinese buying through this year has “helped steady gold and largely kept the benchmark price above $4,000 an ounce.”
Chinese physical gold demand also helped drive the early stages of last year’s gold bull market. While Western retail investors largely sat on the sidelines, Chinese buyers snapped up a record high of 432 tonnes of gold bars and coins in 2025, a 28 percent year-over-year increase. For the first time, physical investment demand outpaced gold jewelry sales.
Chinese institutional buyers have also taken advantage of the dips, evidenced by strong inflows into Chinese gold ETFs.
Huaan Fund Management Co. operated the country’s largest gold ETF. A company analyst said the equity selloff has boosted institutional gold demand, and interest increased as the price dipped toward the $4,000 level.
Asian funds added 16.2 tonnes of gold in September, valued at $2.3 billion. It was the third straight month of inflows after a brief pause last summer.
Chinese funds reported the largest positive gold flows, while activity also increased in India, Japan, South Korea, and Singapore. The World Gold Council said this highlights “the breadth of regional buying.”
ETFs are a convenient way for investors to play the gold market, but owning ETF shares is not the same as holding physical gold.
Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
