2026-05-05 10:37:57
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Golds recent range-bound action between 4,500–5,500 dollars per ounce has analysts debating: is it more likely to test 4,000 first, or break toward 6,000? On the screen, those levels look expensive. But the World Gold Councils cross-asset perspective suggests a different conclusion: from a global allocation standpoint, gold remains strategically under-owned. Meanwhile, Chinas physical demand central-bank buying provide a real-world illustration of that thesis.
Chinas market tells part of the story.
WGC data shows Chinas wholesale gold demand surged 57% month-on-month in March to 134 tonnes, lifting Q1 total demand to 345 tonnes (+3% year-over-year). The structure, however, reveals a clear shift: Jewellery demand softened as high prices made consumers more selective; investment bars and coins strengthened, alongside sustained net inflows into domestic gold ETFs; Central-bank buying continued quietly, with the Peoples Bank of China adding ~5 tonnes in March—its 17th straight month of purchases, for a Q1 total of ~7 tonnes.
This "price correction, demand rebound" pattern is behavioural finance in action: retailers pause at peaks, wholesalers and investors step in during pullbacks, and the central bank maintains its rhythm. Marchs price dip even trimmed golds share of Chinas reserves from ~10% to ~9%, but that hasnt slowed the PBoCs steady accumulation.
The global context makes the pattern clearer.
WGCs ‘Why gold in 2026?’ report examines the broader asset landscape: Equities at stretched valuations, propped up by fiscal stimulus and easing hopes; bonds offering yields that arent "cheap" after inflation and deficit risks; rising equity–bond correlations, weakening traditional 60/40 diversification.
In this environment, golds marginal value increases: Low correlation to stocks and bonds across most macro scenarios; reliable liquidity as a funding source in stress; strategic buffer against policy uncertainty, geopolitics and speculative froth.
Chinas actions align with that logic.
Wholesale demand jumped 57% as prices retreated. The central bank bought for the 17th month running. Domestic ETFs saw inflows. This isnt panic buying—its measured accumulation by agents who see current levels as "strategic opportunity" rather than "expensive".
Two perspectives converge:
China view: Physical demand rebounds 57% on pullbacks; the PBoC methodically builds reserves month after month.
Global view: Stocks and bonds look rich, correlations higher, making golds portfolio slot more valuable than its chart price suggests.
For investors, the question isnt just "is gold expensive here?" Its "is gold expensive relative to the risk in the rest of my portfolio?"
When Chinas wholesalers reload during corrections, its central bank buys for the 17th month, and WGC highlights gold as under-owned across institutions, the answer from both East and West seems remarkably consistent:
On the chart, gold looks expensive. In the allocation table, it still looks underweight.
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Risk Disclosure
This report is based on publicly available information ***mainstream media coverage. Policies ***data may change upon release of official documents ***judicial rulings. Precious metal prices are affected by USD dynamics, interest rates, geopolitics, ***central bank demand, among other factors, ***are subject to significant volatility. Any investment views herein are f***reference only and do not constitute investment ***trading advice f***any individual. Please assess decisions prudently in light of your own risk tolerance ***financial conditions.
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