China imported 163t of gold in May, the highest in over a year, while the PBOC sold $60B in dollars for monetary gold. Hong Kong infrastructure expansion and a July 24 deadline for speculative longs are key markers.
China imported 163 tonnes of non-monetary gold in May, the highest monthly total in over a year, according to data cited by King World News. The country's total non-monetary gold imports reached 692 tonnes in the first five months of 2026.
The People's Bank of China sold roughly $60 billion of foreign currencies, almost all dollars, to acquire 40 tonnes of monetary gold through the end of June, the report said. China's commercial banks offloaded an additional $100 billion through May to fund non-monetary gold purchases.
Silver buying also accelerated. China imported 1,626 tonnes of silver in the first quarter, with the PBOC selling a further $4 billion to cover those purchases, King World News reported, citing analyst Alasdair Macleod.
The buying spree extends beyond precious metals. China has also increased imports of copper, sulphuric acid and fertilisers, while reducing exports of those commodities for dollars, Macleod wrote.
Hong Kong infrastructure build
China is expanding its gold trading infrastructure in Hong Kong. The PBOC no longer requires permission to export gold to the territory, Macleod noted. Authorities are setting up a clearing and settlement system, reviving dollar gold futures trading alongside yuan gold futures, and establishing a delivery connection with the Shanghai Gold Exchange.
Tax incentives for gold trading in Hong Kong have been introduced. New gold-linked investment vehicles are being created, including for onshore pension funds. Storage capacity is being expanded to more than 2,000 tonnes, according to the report.
Macleod argued the moves signal China is preparing to reduce reliance on the dollar and could eventually back the yuan with gold. The analyst pointed to the PBOC's simultaneous dollar selling and gold buying as evidence of a deliberate shift.
Open interest at multi-year lows
Comex gold open interest remains at the lowest levels since 2014, Macleod wrote. Silver open interest is also near multi-year lows after a brief uptick. The analyst said Chinese banks have asked onshore speculators to close their positions by July 24, which he interpreted as a sign that banks want to cover shorts ahead of a potential price move.
"The establishment is short and effectively refusing to print more silver-linked paper," Macleod wrote. "In China, they merely command the longs to close their positions. The Swaps don't have that luxury."
The PBOC's Hong Kong expansion and the July 24 deadline for speculative longs are the next concrete markers to track. Storage capacity targets and the pace of gold imports in June will also signal whether the buying continues.
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