China Is Buying Gold at a Stunning Pace and Now Silver Faces a $60 Test
Gold suffered a sharp selloff Monday. Yet one of the most important stories in the bullion market has little to do with a single trading session.
China keeps pulling enormous quantities of physical gold into the country.
Meanwhile, silver has arrived at a potentially important crossroads. After falling back toward $60 an ounce, the metal now faces a test that could help shape its next major move.
Around midday Monday, spot gold traded near $4,165 an ounce, down roughly 2.8% for the session. Silver traded near $61.29, down about 4.5%. A stronger U.S. dollar, rising Treasury yields, and renewed concerns over interest rates pressured both metals.
China’s Gold Appetite Keeps Growing
Heraeus estimates that China imported 142 tonnes of gold in August. That pushed imports during the first eight months of 2026 to 1,141 tonnes.
More importantly, Heraeus projects that China could import roughly 1,700 tonnes for the full year if the current pace continues.
That would mark the strongest annual total of the 2020s.
Separate reporting also confirms that Chinese imports surpassed 1,000 tonnes through August despite historically high prices. Investment demand remains a major driver, while China’s jewelry sector continues to struggle with high prices and weak consumer demand.
China’s central bank also continues to accumulate metal.
The People’s Bank of China reported another 20.2-tonne purchase in August. That represented its largest monthly addition since October 2023. Moreover, the August purchase extended the bank’s buying streak to 22 consecutive months and lifted reported holdings to 2,387 tonnes.
Taken together, those flows tell an important story. High prices have slowed some traditional jewelry demand. However, they have not stopped investment and official-sector demand for physical gold.
Physical Gold Moves Beyond China
Other countries also continue to reshape the physical gold market.
Australia produced 303 tonnes of gold during its 2025–26 fiscal year, up four tonnes from the previous year. The country has now maintained annual production near 300 tonnes for much of the past decade. High gold prices continue to support both established mines and smaller producers.
Indonesia, meanwhile, wants to bring more privately owned gold into its financial system.
Government officials estimate that Indonesian households hold about 1,800 tonnes of gold. They want state institutions to attract roughly 20% of that metal, or about 360 tonnes, into bullion banking and other financial products.
The goal is simple: turn privately stored gold into deposits, collateral, and investable financial assets. Indonesia’s government has already built a bullion-banking system that manages more than 150 tonnes of gold.
India Shows the Other Side of the Gold Story
India presents a different challenge.
The country’s 2026 monsoon has struggled. Rainfall has run about 15% below normal, raising concerns about crops and rural incomes.
That matters to gold.
Rural households still account for a majority of Indian gold demand. In addition, the World Gold Council has found that stronger rainfall historically supports higher gold consumption. Therefore, weaker farm income could restrain purchases during India’s crucial festival and wedding season.
Silver Approaches the $60 Line
Silver may face the more immediate technical drama.
Heraeus sees the area around $60 an ounce as an important dividing line. Silver traded above $70 earlier in the year before retreating sharply.
Now the metal must contend with a stronger dollar and rising real interest rates.
The U.S. Dollar Index has returned to roughly 101, while the 10-year Treasury yield has climbed to around 5.2%. Those conditions raise the opportunity cost of holding precious metals because gold and silver pay no interest.
Heraeus argues that a renewed silver rally toward $70 despite those headwinds could strengthen the case that the metal has formed a bottom. However, a sustained break below $60 could open the door to additional weakness.
Physical demand remains another piece of the puzzle.
India imported 15.5 million ounces of silver in August, according to Heraeus. That marked a rebound after several weak months. Even so, imports through August remained well below last year’s pace. India tightened silver import rules earlier this year, while high prices also discouraged buyers.
For bullion investors, the contrast could hardly look sharper.
Gold continues to attract enormous physical flows from China even above $4,000 an ounce. Silver, meanwhile, sits only a short distance above a price level that traders increasingly view as critical.
The paper markets may control the next headline.
But underneath them, physical metal continues to move.
