Gold Flow Update — PBOC Official Buying Reaccelerates, but China “Regular” Imports Are the Bigger Story

The latest gold flow data is constructive and reinforces the idea that gold is being supported by multiple demand channels at once:

1. renewed official PBOC buying,

2. very strong Chinese non-monetary / “regular” imports,

3. positive CTA momentum signals,

4. ongoing demand for short-dated upside structures,

5. and a broader macro backdrop of falling USD / lower real-yield sensitivity / policy-risk hedging.

The core takeaway:

The PBOC is back on the bid, but the bigger YTD story is that China’s non-monetary gold imports have surged far more than reported global central-bank buying has declined. That suggests Chinese private / quasi-private gold demand is now a dominant marginal flow.

1. PBOC Bought 20 MT in July

On Friday, the PBOC reported:

• 20 metric tons of gold buying in July

This was the largest single-month official accumulation since:

• October 2023

That matters because PBOC buying had previously slowed / paused in official data, which had created questions about whether China’s official-sector demand was fading.

The July print suggests the PBOC is still structurally accumulating.

2. Possible Upward Revision Risk for June / July

The note flags an important discrepancy.

During April and May:

• UK export data implied roughly 27 MT per month of buying

• PBOC official data showed only roughly 9 MT per month

That gap suggests official PBOC data may understate actual buying, or that some flows are being recorded with a lag.

Simple comparison:

The implication:

There may be upward revision risk to June / July official PBOC data, or continued divergence between customs-implied flows and official reserve reporting.

This supports the idea that China’s official-sector gold demand may be stronger than headline PBOC disclosures suggest.

3. Bigger Story: China “Regular” Imports Are Surging

The most noteworthy trend year-to-date is not just PBOC buying.

It is the scale of Chinese regular / non-monetary imports.

Comparing 1H26 vs 2H25:

This is very important.

China’s regular imports rose by 390 MT, while reported global central-bank buying declined by only 62 MT.

So the increase in Chinese non-monetary imports more than offsets the decline in reported global reserve-manager activity.

In flow terms:

+390 MT China regular imports−62 MT lower reported CB demand=+328 MT net positive swing+390 MT China regular imports−62 MT lower reported CB demand=+328 MT net positive swing

That is a large support for gold demand.

4. Bonded Flows Are Driving the Increase

The increase in Chinese regular imports is reportedly driven by stronger bonded flows.

This matters because bonded flows can reflect:

• inventory build

• wholesale / institutional demand

• re-export dynamics

• financial demand

• supply-chain positioning

• quasi-official or policy-sensitive demand channels

• domestic premium / arbitrage-related flows

The key point is that gold demand is not only visible in official reserve data.

China-related demand is showing up across broader import channels.

5. China Ex-PBOC Demand May Be the Marginal Buyer

The note’s strongest implication is:

Even if reported central-bank demand looks less spectacular, China ex-PBOC demand has become extremely important.

This shifts the analytical focus from:

• “Is the PBOC buying?”

to:

• “How large is total China-linked gold demand, including non-monetary imports?”

That broader measure looks much stronger.

This also helps explain why gold can stay firm even when official central-bank buying appears to slow.

6. Franchise Flows: Still Short-Dated, Still Tactical

Franchise flows are still dominated by:

• 3–6 month digital-type structures

This means clients are still expressing gold upside through structured / option-like products rather than heavy long-dated outright positioning.

That has two implications.

Constructive

Short-dated upside demand can reinforce rallies if spot keeps moving higher.

Cautionary

The absence of longer-term engagement suggests not everyone is structurally committed yet.

The franchise estimate is:

• 5/10

So engagement is moderate, not euphoric.

7. 3M Skew Repricing Suggests Spec Activity Is Returning

The note flags that 3-month skew has repriced.

That matters because 3M skew is often a useful barometer for speculative activity.

If upside skew is richening, it suggests:

• more demand for upside calls

• more speculative interest

• more bullish convexity buying

• possible screen-based activity rather than only franchise structures

• renewed participation from macro / fast money

This fits with the recent gold rally and CTA short-covering.

8. CTA Momentum Has Flipped Positive

This is an important technical / systematic confirmation.

CTA momentum indicators have now flipped positive.

That means trend-following models are moving from:

• covering shorts

toward potentially:

• adding longs if the trend persists

The flow sequence is usually:

1. shorts get stopped out

2. risk-management rules force covering

3. momentum signals improve

4. systematic models turn neutral

5. positive trend signals create outright long demand

Gold appears to be moving through that transition.

The mechanical implication:

Gold Up→Short Covering→Momentum Flip→Potential CTA Long AdditionsGold Up→Short Covering→Momentum Flip→Potential CTA Long Additions

9. Why This Is Macro-Relevant

Gold is being supported by several overlapping themes:

• USD softness

• weaker payrolls

• possible Fed easing repricing

• real-yield sensitivity

• central-bank diversification

• China reserve diversification

• geopolitical risk

• concern around US fiscal / policy credibility

• tariff / inflation risk

• private Chinese demand

• CTA short covering

• options upside demand

This makes gold less dependent on any single catalyst.

10. Key Market Implications

Bullish Gold

The flow backdrop is improving:

• PBOC bought 20 MT in July

• possible underreporting / upward revision risk

• China regular imports surged +390 MT

• reported global central-bank buying only fell 62 MT

• CTA momentum flipped positive

• 3M skew repricing suggests renewed spec demand

Not Yet Euphoric

However, engagement is not stretched:

• franchise activity is only 5/10

• longer-term engagement is not yet visible

• flows still dominated by 3–6 month digital structures

This suggests there may still be room for broader participation if the rally continues.

China Demand Is the Anchor

The most important structural support is China-linked demand, especially regular imports.

11. Tactical Gold Framework

Constructive Above Recent Breakout Levels

If gold holds recent gains, CTA buying can continue and options demand may reinforce upside.

Watch Real Yields and USD

A weaker USD or falling real yields would strengthen the move.

Watch Chinese Import / Premium Data

If China regular imports stay strong, dips may remain well-supported.

Watch PBOC Monthly Prints

A continuation of official buying after July’s 20 MT would reinforce reserve-diversification demand.

Watch Skew

Further repricing in 3M skew would indicate more speculative upside demand.

The gold flow picture has improved meaningfully. The PBOC reported 20 MT of buying in July, the largest single-month official accumulation since October 2023. UK export data from April and May had already implied materially stronger buying than official PBOC figures, suggesting possible upward revision risk or underreported reserve accumulation.

But the bigger story is China ex-PBOC demand. Chinese regular imports rose to 862 MT in 1H26 from 472 MT in 2H25, a +390 MT increase, driven by bonded flows. That far exceeds the 62 MT decline in reported global central-bank buying over the same comparison period.

Meanwhile, franchise flows remain moderate and tactical, dominated by 3–6 month digital structures, but 3M skew repricing suggests speculative activity is returning. CTA momentum indicators have now flipped positive, meaning gold has moved from short-covering support toward potential systematic long demand.

In short: PBOC is back, China non-monetary imports are the bigger demand shock, and CTAs are now turning supportive.