Select Language:
Last year, the demand for gold investments among Chinese residents surged as international gold prices climbed, leading to rapid growth in banks’ precious metal divisions.
Financial reports from thirteen banks that disclosed their data for the previous year indicate that their precious metal assets exceeded 1 trillion RMB (around $146.5 billion). Notably, six banks experienced their assets doubling compared to 2024.
Experts believe that sustained consumer demand for gold purchases remains a key driver behind the expansion of banks’ precious metal businesses.
For instance, Postal Savings Bank’s gold accumulation program saw a 270% increase in transaction volume in 2025 over the prior year, with income from these activities rising more than 160%, according to their annual financial report.
Similarly, both Bank of Communications and Bank of China recorded significant growth in their gold sales revenue, with increases of 33% and 114%, respectively, during the same period.
Industrial and Commercial Bank of China reported net income of 111.2 billion RMB (around $16.3 billion) from fees and commissions last year, which was an increase of 1.8 billion RMB ($260 million) from 2024. The boost was primarily driven by higher earnings from related activities like gold agency services.
By the end of last year, Shanghai Pudong Development Bank’s precious metal assets reached 82.4 billion RMB (approximately $12.1 billion), marking a 257% jump year-over-year. Ping An Bank’s holdings also grew substantially, expanding 145% to 30.9 billion RMB within the same period.
According to the World Gold Council, Chinese investors purchased a record 432 tons of gold bars and coins in 2025, reflecting a 28% increase from the previous year. Additionally, the China Gold Association reports that gold bar and coin consumption in the country rose 35%, totaling 504.2 tons for the year.
Despite the challenges posed by high market volatility this year, analysts say banks are continuing to deepen their engagement in the precious metals sector. Continuous gold buying by global central banks underpins the medium- and long-term stability of these investments, which could increasingly support banks’ profitability.
In response to gold price fluctuations, some banks have implemented measures such as raising minimum purchase amounts and enhancing risk warnings. For example, Industrial and Commercial Bank of China has increased the minimum purchase from CNY650 ($95) to CNY1,300 ($190), while China Construction Bank raised its threshold to CNY1,500.
Market opinions on future gold prices remain divided, but the core support for medium- and long-term growth persists. Qu Rui, a senior deputy director at Golden Credit Rating International, points out three main factors influencing gold’s longer-term trend:
1. The normalization of geopolitical risks, U.S. fiscal pressures, and weakening U.S. dollar credit.
2. Rising energy prices and potential interest rate cuts, which suppress real interest rates.
3. Ongoing increases in gold holdings by central banks worldwide amid shifts in global political and economic dynamics.
Demand for gold as a reserve asset is expected to stay robust this year. However, Qu notes that short-term fluctuations driven by geopolitical tensions, inflation expectations, and monetary policy adjustments could lead to significant price swings, with periods of rapid increases and declines in gold prices amidst high market volatility.
ChatGPT
Perplexity
Gemini AI
Grok AI
