Insights 
VT 
China’s Gold Demand Dynamics
Demand for Gold bars and coins increased, reaching 352 tons, surpassing last year’s figures by 24.5%. This accounted for over half of the total Gold demand. The People’s Bank of China (PBoC) continued its Gold purchasing streak for the twelfth consecutive month in October. Despite this, the purchases were minimal, with only around 1 ton added.
Throughout these twelve months, the PBoC accumulated 40 tons of Gold. In comparison, other central banks, like those in Poland and Kazakhstan, acquired more Gold this year. The divergent trends indicate varied approaches and levels of Gold acquisition among different countries.
Given the current date of November 11, 2025, we are seeing a clear split in gold demand from China. The 8% drop in overall demand is being driven entirely by a collapse in the jewelry sector, which is reeling from high prices and new taxes that just began this month. With gold currently trading around $2,550 an ounce, this consumer weakness is likely to act as a ceiling on any rapid price appreciation.
Investment Demand and Trading Strategies
However, a powerful floor is being built by strong physical investment demand. Chinese investors increased their purchases of bars and coins by nearly 25%, signaling a significant flight to safety amid domestic economic uncertainty. This demand for hard assets, separate from discretionary consumer spending, suggests that any significant price dips will likely be met with strong buying support.
The People’s Bank of China continues its slow and steady accumulation, but the bigger story remains global central bank buying, which has been a defining feature since the major purchases we saw back in 2023 and 2024. The World Gold Council has confirmed that central banks globally added over 800 tonnes to their reserves in the last four quarters, providing a persistent tailwind for the market. This structural demand is a key factor that prevents us from being outright bearish.
This divergence between weak consumer demand and strong investment demand creates a complex trading environment. The CBOE Gold Volatility Index (GVZ) is hovering around a modest 19, suggesting the market is not pricing in a major breakout, but the conflicting signals could lead to sudden shifts. We believe this environment is less suited for simple directional bets via futures.
For the coming weeks, we see opportunity in selling premium rather than chasing direction. Selling out-of-the-money puts or implementing bull put spreads with a strike below the $2,500 psychological level looks attractive. This strategy profits from time decay and the strong physical bid that is likely to defend that price level.
Conversely, the weak jewelry demand, further dampened by recent Chinese retail sales data that showed growth slowing to 2.5%, makes a significant upside breakout less probable. Selling covered calls against existing long positions or using bear call spreads could be an effective way to generate income. This capitalizes on the resistance likely to be met as prices rise further.
We also note a divergence with Western sentiment, as major gold ETFs like GLD saw net outflows of nearly $500 million in October. This hesitation from paper markets contrasts sharply with the physical accumulation seen in the East. This confirms our view that the market is currently range-bound, caught between two very different narratives.
