Investment demand fuels China's gold buying

A salesperson fetches gold jewelry at a store on Nanjing Road Pedestrian Street in Shanghai on Aug 29. [Photo provided to CHINA DAILY]

Rising capital expenditure, falling ore grades and strict permitting processes discourage aggressive expansion among Western mining majors, it said.

Chinese gold producers are charting a different course. Major domestic miners balance commercial returns with national resource-security priorities.

According to the CGA, State-owned giants including China National Gold Group and Shandong Gold Group reported steady production growth abroad during the first half this year. Overseas mine production by these large groups reached 48.10 tons, a robust 21.43 percent year-on-year increase, it said.

According to S&P Global, China's domestic gold mine output edged up merely 1 percent to 381 tons last year, yet overseas production from top Chinese gold firms jumped 25 percent to 90 tons meanwhile.

Leading players including Zijin Mining and Shandong Gold have scaled-up cross-border mergers and acquisitions since 2022, closing multi-billion-dollar deals across Latin America, Central Asia, Africa and Oceania, it said.

Improved project-execution capacity, solid balance sheets and ample financing allow these companies to press ahead with global expansion without material weakening of their credit profiles. More Chinese miners are expected to climb into the ranks of the world's top gold producers, it said.

This outward momentum has continued robustly into 2026. While domestic gold output from raw materials dropped 14.62 percent year-on-year to 152.91 tons in the first half due to strict safety and environmental inspections, overseas mine production by large State-owned groups reached 48.10 tons, a 21.43 percent increase, according to the CGA.

As the world's largest gold consumer, China's rising offshore output demonstrates that proactive mergers and acquisitions are serving as a vital buffer, Zhao noted.

"Chinese enterprises are securing high-quality assets at attractive valuations while deploying advanced extraction technologies," Zhao said.

"By securing upstream physical assets globally, domestic mining giants are anchoring the country's physical reserves and steadily expanding China's long-term influence over global precious metal market."

Obstacles remain. Easily accessible, high-grade shallow gold deposits are increasingly scarce worldwide. Cross-border regulatory hurdles also create uncertainty for outbound deals. Still, domestic exploration continues to deliver large-scale new gold discoveries inside China, he added.

China's multi-faceted push on gold reflects both domestic needs and wider global shifts. Geopolitical fragmentation has pushed numerous developing nations to diversify official reserve assets. Chinese households, central-bank planners and domestic miners are each responding to this new environment.

Industry experts believe that gold will continue to serve multiple functions: festive ornament for consumers, wealth-preservation tool for households, strategic reserve asset for policymakers, and critical mineral resource for industrial players.

As global tensions persist, China's footprint within international gold markets looks set to deepen, they say.

Trading on the Shanghai Gold Exchange has maintained strong momentum this year. According to Zhao, this vigorous market activity deepens China's footprint across the global gold supply chain and advances the nation's push for international pricing authority.

"China has long anchored the market as the world's top gold producer and consumer, backed by the central bank's steady accumulation of reserves and the aggressive global expansion of domestic miners," Zhao noted.

"Amid today's geopolitical turbulence, China has forged a highly resilient, end-to-end gold ecosystem — spanning physical extraction and logistics to spot trading and complex financial derivatives," he added.