Major Adjustment in China's Gold Import Policy: Asia-Pacific Gold Market Ushers in Diversified New Landscape

July 29, 2026, Beijing - The People's Bank of China (PBOC) today issued the "Notice on Adjusting Gold Import Management Policies," announcing that from August 1, it will significantly ease the qualifications for commercial banks to import gold, allowing more qualified commercial banks to directly participate in gold imports and canceling some previous quota restrictions. This is the most significant policy reform since China opened gold imports in 2015, aiming to improve the gold market system, enhance the international pricing power of the Shanghai Gold Exchange, and have a profound impact on the Asia-Pacific gold market landscape.

Policy Core: Ease Access, Strengthen Market Self-Regulation

According to the notice, the key points of the new policy include:

• Expand gold import enterprises from the original 15 designated commercial banks to all eligible commercial banks, and require applicant institutions to have a certain scale of gold trading business volume and risk control capabilities.
• Cancel some non-essential import quotas and adopt a filing system based on market demand to improve import flexibility and efficiency.
• Encourage commercial banks to import gold through the Shanghai Gold Exchange International Board to promote the internationalization of renminbi-denominated gold.

A relevant official from the central bank stated that this adjustment is an important step in deepening the reform and opening up of the gold market, helping to smooth the international and domestic gold cycle and enhance China's influence in global gold pricing. Previously, China's gold imports were mainly conducted through the Shanghai Gold Exchange International Board and a few designated banks. Market participants believed that the channels were relatively single and had some room for rent-seeking. The new policy aims to introduce competition, reduce import costs, and improve market transparency.

Market Impact: Short-Term Supply Increase, Long-Term Pricing Power Restructuring

Market analysts believe that the new policy will increase domestic gold supply in the short term and lower domestic gold premiums. China is the world's largest gold consumer, with annual imports accounting for over 30% of global gold production. In the past, due to quota restrictions, domestic gold prices were usually higher than the international benchmark. After the policy relaxation, import costs will decrease, and the spread between domestic and international gold prices may narrow, putting some pressure on the spot prices of the Shanghai Gold Exchange.

But in the long run, this move is expected to strengthen the pricing benchmark status of Shanghai Gold. As more commercial banks participate in imports, the liquidity of renminbi-denominated gold will significantly increase, attracting more international investors to use Shanghai Gold as a trading and hedging tool. Goldman Sachs recently released a report stating that China's gold market opening is entering the "2.0 phase," similar to the internationalization path of crude oil futures in 2018, and it is expected that the global share of renminbi-denominated gold contracts will rise from the current 15% to 25% in the next three years.

Asia-Pacific Gold Market Chain Reaction: Central Bank Reserve Strategies May Adjust

China's policy changes quickly affected the Asia-Pacific region. The Singapore Gold Traders Association said that China's easing of imports could lead to changes in gold spot flows in the Asia-Pacific region. "Previously, Chinese importers preferred to purchase from Hong Kong, Singapore and other places. Under the new policy, more banks may directly import from London and Zurich, and the warehousing and transshipment costs in the intermediate links will be reallocated." The Southeast Asian Gold Jewelry and Related Industries Association is also closely watching, fearing that China's import policy adjustment may intensify competition for gold supply in the region and affect local gold prices.

At the same time, the gold reserve strategies of Asia-Pacific central banks may also be indirectly affected. The People's Bank of China currently holds about 72.8 million ounces (about 2,260 tons) of gold reserves, accounting for 5.5% of its foreign exchange reserves. Analysts point out that China's emphasis on renminbi gold pricing power means that the central bank's strategic positioning for gold is not simply to increase the quantity of reserves, but to focus more on market influence. Analysts at the Commonwealth Bank of Australia believe that this may encourage other Asia-Pacific central banks, such as India and Indonesia, to pay more attention to local market pricing mechanism construction while increasing their gold holdings.

According to the latest data from the World Gold Council, the net gold purchases by Asia-Pacific central banks in the second quarter of 2026 reached 158 tons, up 12% year-on-year. Among them, the Reserve Bank of India increased its holdings for six consecutive quarters, reaching 870 tons; the Bank of Thailand last month announced raising its gold reserve target to 8% of total reserves. China's policy adjustment this time may provide new gold purchase channels and pricing references for Asia-Pacific central banks, accelerating regional gold market integration.

Investment Strategy: Focus on Gold Price Volatility and ETF Fund Flows

For gold investors, China's policy adjustment means more trading opportunities and risks. In the short term, the narrowing spread between domestic and international gold prices may trigger arbitrage trading, and gold ETF holdings may also undergo structural changes. On July 29, the Shanghai Gold Exchange AU9999 contract closed at 478.5 yuan per gram, and the spread with London gold narrowed from 3 yuan/g a week ago to 1.8 yuan/g. Analysts expect that after the policy is implemented, the spread may further compress to below 0.5 yuan.

In terms of operations, investors are advised to focus on the following strategies:

• Utilize the narrowing spread between domestic and international prices for arbitrage trading, but be aware of liquidity risks.
• Increase attention to Shanghai Gold futures prices, as their enhanced pricing independence can serve as an important reference for global gold trading.
• Track the fund flows of China's gold ETFs. If domestic gold prices weaken relatively, gold ETFs may face redemption pressure, but in the long run, a healthier market helps attract allocation funds.

In addition, the correlation between other gold exchanges in the Asia-Pacific region (such as the Tokyo Commodity Exchange in Japan and the Multi Commodity Exchange of India) and the Chinese market will increasingly strengthen, and cross-market spread trading opportunities are worth exploring.

Future Outlook: Asia-Pacific Gold Market Enters "Rule Reshaping Period"

The adjustment of China's gold import policy is just a microcosm of the changes in the Asia-Pacific gold market. As central banks in various countries attach more importance to the strategic and pricing functions of gold, regional cooperation and competition are deepening simultaneously. The head of the World Gold Council's Asia-Pacific region said that in the second half of 2026, the Asia-Pacific gold market will usher in three major trends: first, the rise of the renminbi gold pricing system led by China; second, India and Southeast Asian countries deepening gold industrialization reforms; third, the gold reserve strategy of Asia-Pacific central banks shifting from "quantity increase" to "quality improvement." In this context, investors need to closely monitor policy dynamics and seize structural investment opportunities.

(Asia REIT Perspective & Asia-Pacific Gold Market Strategy Research Report)