China Gold Buying Surges While India's Silver Market Tightens at $80 for Silver
- Gold and silver ended the week lower as renewed reports of a breakdown in the U.S.-Iran ceasefire weighed on investor sentiment. Silver spot price closed at $59.89 per ounce, gold settled at $4,120 per ounce, and the gold-to-silver ratio finished the week at 68:1.
- China's appetite for physical gold continues to strengthen during the recent price correction. The country has imported nearly 700 metric tons of gold through May 2026, while the People's Bank of China reported its 20th consecutive month of official gold purchases, highlighting ongoing sovereign demand.
- Chinese investors are increasingly favoring gold as a long-term store of value. Assets held in Chinese gold ETFs have reportedly expanded from roughly $4 billion to $40 billion in less than three years, reflecting growing domestic investment demand despite recent market volatility.
- The divergence between Eastern and Western precious metals markets remains pronounced. Chinese silver continues trading at premiums exceeding 10% above Western benchmarks, while Western silver ETF liquidations have supplied additional metal to COMEX and London inventories.
- Several veteran commodity analysts remain constructive on the long-term outlook for precious metals. Historical commodity supercycles, along with momentum studies discussed during the week, were cited as supporting the possibility of substantially higher gold and silver prices over the coming years.
- Structural fundamentals for silver remain supportive. According to the Silver Institute's World Silver Survey, 2026 is expected to mark the sixth consecutive annual silver market deficit, with industrial demand from solar energy, electric vehicles, artificial intelligence, data centers, and electronics continuing to outpace mine supply.
- India's silver market is experiencing one of its tightest supply environments in years. Import restrictions, higher duties, and limited fresh imports have pushed local silver premiums to approximately $6 per ounce, resulting in Indian buyers paying close to $80 per oz for silver.
- Industry analysts note that India's current premium reflects a supply bottleneck rather than unusually strong seasonal demand. With festival and wedding season approaching later this year, market participants are closely watching whether imports resume before physical demand accelerates.
- Global mining reserve data continues to reinforce long-term supply dynamics. Australia and Russia remain among the world's largest gold reserve holders, while Peru, Russia, Australia, China, and Poland are positioned as leading silver-producing nations for years to come.
- Despite short-term price weakness, the broader story remains centered on persistent physical demand in Asia, ongoing central bank gold accumulation, and structural silver supply deficits. Those longer-term trends continue to provide an important backdrop for precious metals investors beyond this week's geopolitical headlines.
Renewed Middle East tensions pressured gold and silver this week, but surging Chinese gold demand, India's $80 silver market, and ongoing global supply deficits continue to reinforce the long-term precious metals outlook.
Last week's Gold and Silver Market Update
- The precious metals market came under pressure this week with another reported collapse of the US-Iran ceasefire.
- The spot silver price closed at $59.89 oz bid.
- The spot gold price closed the week at $4,120 oz bid.
- The spot gold silver ratio closed the week at 68.
India +$80 oz Silver Bullion, China Leads Again in Gold Price Dip Buying
China's gold buying is again hitting levels not seen for years as investors there take advantage of recent price weakness in gold, silver, and other precious metals.
China has now imported nearly 700 metric tons of gold through May of this year 2026, with import figures ramping higher on gold's recent price selloff.
These are China's monthly gold and silver price charts respectively over the last two decades. It is common to see them increase their bullion buying imports after large local spot price selloffs.
So this recent data is no surprise.
Even their stock and ETF market's now largest single ETF is a gold ETF recently surpassing a once leading local Chinese equity fund.
One look at the over 20 Gold ETFs in China and you can see the near 10 fold move in terms of notional value held within unsecured gold ETFs in China over only the last 2.5 to 3 years of time past. Basically from $4 billion to $40 billion in gold ETFs since late 2023.
For the 20th month in a row the central bank of China the PBOC also admitted that it added nearly 15 tons of gold in May 2026 alone. Also the highest monthly Official Gold Reserve ton addition since about 3 years ago.
A look over at the US debt held by China and we also see them a recent net seller. Rhyming with much of the world moving from US debt to Gold Bullion instead in their respective Sovereign Reserves.
On the silver side in China we continue to see high premiums of over 10% being spent to acquire silver locally versus Western world silver price benchmarks. The local SGE and SHFE exchanges with just under 60 million oz between the two combined.
Large unsecured Silver ETF selling in the Western world over the last 100 days is illustrated here in this chart provided by Tavi Costa.
Most of the silver added to both the COMEX registered and London float figures of late is silver coming from recent ETF sellers.
On the other side of the break we'll dig further into the silver supply picture not merely worldwide but also focus in on India of late.
Bringing back the points made by Micheal Oliver's Momentum Structure Analysis firm at the start of this month, that historical gold bull market have 8X moves in spot price.
If we define the current secular gold bull as having started at the $1050 oz gold price low in 2015, then further years of good upside should rhyme in time.
Former Goldman Sachs head of commodities Jeff Curry was out making similar points this week publicly.
Visual Capitalist has an interesting graphic this week showing proven gold, silver, and platinum ore reserves in the grounds amongst respective nations.
Australia and Russia poised to lead in gold in the decades to come.
Peru, Russia, Australia, China, and Poland seem poised to lead in silver mining.
And of course South Africa still stands to dominate platinum group metal mining with Russia bringing up the secondary position for the foreseeable future.
In terms of the world silver market's underlying supply demand fundamentals, half the record price has not really changed the eastern vs western world price discovery discrepancies ongoing.
India's recent policy of jacking Indian gold and silver import duties up from 6 to +15% have had dramatic effects on the local silver market as inventories have dried up to basically secondary supplies only priced at high premiums locally versus western world benchmarks.
When you add both the local import tax of +15% and a reported additional $6 oz in local silver bullion market premium basically Indians are paying $80 oz for silver bullion currently.
Here is a longer historical view for how high this is on a relative basis looking back through Indian silver premium price data over the past decade and a half.
Just over a week ago Harshal Barot an Indian bullion market analyst from Metals Focus was on with CNBC TV-18's Manisha Gupta to break down in further details what is happening currently over in the Indian silver market with near record high premiums currently.
The annual silver spot price in India rupee on the left currently consolidating about 3 fold higher than its 2011 price regime high, and the annual silver price in the USA with the fiat US dollar on the right barely now above it's seemingly ancient 1980 and 2011 highs, and price about 10 dollars per ounce below its 200 day moving average this weekend.
Sources:
Silver Faces Both Demand and Supply Uncertainty | Presented by CME Group
https://youtu.be/jroTm6_Z6SU?si=KP5TOmckqOzpRQwo
Silver Holds Above $60/Oz | India Fresh Silver Imports Very Low: Metals Focus | CNBC TV18
https://youtu.be/rqXsQg4aMQY?si=K29aj7WcUU6wDx8H
India silver import curbs create shortages, push premiums to 6-month high
https://www.reuters.com/world/china/india-silver-import-curbs-create-shortages-push-premiums-six-month-high-2026-07-08
Gold: The Apex Predator Returns | Grant Williams
https://www.youtube.com/watch?v=uxh5PIqHr7k
