Record Chinese Gold Imports Fail to Halt Slide as Fed Hawks Tighten Grip
23.06.2026 - 18:26:30 | boerse-global.de
The gold market is wrestling with a glaring contradiction. Chinese imports surged to 692 tonnes in the first five months of the year — a 76% jump from the same period in 2025 — yet the metal continues to trade near six-month lows. Early Tuesday, the spot price stood at $4,123 an ounce, down 1.6% from the previous session, while the broader year-to-date decline of roughly 26% from January's peak of $5,627 underscores the ferocity of the selloff.
The Fed Overwhelms Asian Demand
The primary headwind remains monetary policy. The first Federal Reserve meeting under Chairman Kevin Warsh sent an unambiguous message: inflation fighting takes precedence. Market participants had speculated the new leadership might adopt a softer tone, but those hopes were dashed. Both Deutsche Bank and BofA Global Research now pencil in a rate hike for September. Higher real yields make non-yielding gold less compelling, and the yield on ten-year Treasuries has inched higher, though it stays below 4.5%.
Weighing alongside the Fed is a resurgent dollar. The euro slipped to $1.1383 — its weakest since June 2025 — making dollar-denominated bullion more expensive for overseas buyers. The relative strength index on gold sits at 35, signaling an oversold condition, yet no meaningful bounce has materialised.
Diplomatic developments are adding to the pressure. Washington granted Iran a 60-day license to sell oil on international markets, and shipping traffic through the Strait of Hormuz has picked up. That has pushed crude prices lower, dragging down inflation expectations and diminishing gold’s appeal as an inflation hedge. The premium that had been baked into gold after the Iran conflict erupted on February 28 is steadily being unwound, prompting profit-taking.
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China’s Buying Spree in Focus
Chinese gold imports hit roughly 163 tonnes in May alone, the highest monthly tally since March 2024. Analysts at the Guangzhou Southern Gold Market Academy attribute the surge to robust demand for physical bars and the success of gold savings plans. A new licensing system that took effect on June 1 is also easing market access for select Chinese banks, helping to stabilise supply.
Yet the buying has done little to arrest the decline. The spot price of $4,142 quoted in the secondary article — a level also cited as the latest — is down sharply from late January’s all-time high. And the forces aligned against gold are not limited to the dollar and rates. The correction in technology stocks has drained liquidity from the broader market, and silver has followed gold lower. A dip in jewellery demand adds another layer of weakness: global offtake slumped 24% quarter-on-quarter in the first quarter to 335 tonnes, with China falling 32%, India 18% and the Middle East 23%.
Central Banks: A Long-Term Anchor Under Strain
Central bank purchases have been the bedrock of the bull case. In the first quarter of 2026, monetary authorities bought a net 244 tonnes of gold, with another 17 tonnes added in April. China itself has expanded its reserves for 18 consecutive months. Goldman Sachs forecasts that central banks will buy around 50 tonnes per month this year and roughly 40 tonnes monthly in 2027, providing structural support.
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The longer-term outlook remains constructive. A World Gold Council survey found that 45% of central banks plan to increase their gold reserves over the coming year, while 83% expect a higher gold allocation on a five-year view. But the near-term divergence is stark. Goldman recently cut its end-2026 forecast from $5,400 to $4,900. J.P. Morgan, by contrast, sees the metal at $6,000 in the fourth quarter of this year. Bank of America maintains its $6,000 price target, contingent on continued de-dollarisation.
What Could Shift the Balance
The next catalyst arrives on June 25, when the core PCE price index for May and the final first-quarter GDP growth reading are due. If oil’s slide feeds into softer inflation prints, the rate-hike expectations that are currently weighing on gold could recede. For now, the tug-of-war persists: Asian physical demand and central bank buying on one side, a hawkish Fed and a strong dollar on the other. Whichever force prevails will likely become clear only when the central bank delivers its next rate decision in the autumn.
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