Gold Price Today: Gold Hits 3.5-Month High, China Buying Adds to Rally
Gold prices have climbed to their highest level in more than three months, with the international price moving above $4,600 per ounce and Indian gold futures trading around ₹1.63 lakh per 10 grams. The latest rally has been driven by a combination of a weaker US dollar, lower bond yields, safe-haven demand and renewed investor buying.
But there is another important factor attracting attention in Asia: China's growing appetite for gold.
The world's second-largest economy has continued adding gold to its reserves, while Chinese gold ETFs have also seen fresh inflows. The World Gold Council says China's central bank added 20 tonnes of gold in July, taking its official holdings to 2,366 tonnes and extending its buying streak to 21 consecutive months.
That does not mean China alone is responsible for the latest jump. The current rally has several drivers, and understanding them is more important than focusing on a single headline.
Gold Price Today: Why Has Gold Reached a 3.5-Month High?
International spot gold reached around $4,677 per ounce on August 24, its highest level in more than three months, according to Reuters. US gold futures were also trading higher.
The rally accelerated after gold broke above its 200-day moving average last week, a technical signal that encouraged additional buying.
Three major factors are currently working in gold's favour:
A weaker US dollar
Lower US bond yields
Stronger safe-haven and investment demand
The US Treasury's announcement of increased buybacks of longer-term government bonds has also affected the bond and currency markets. The weaker dollar makes gold cheaper for investors holding other currencies, while falling yields reduce the relative disadvantage of holding a non-interest-bearing asset such as gold.
China Is Becoming an Important Part of the Gold Story
China is particularly relevant because it is one of the world's biggest gold markets and its central bank has been steadily increasing its holdings.
According to the World Gold Council, the People's Bank of China added 20 tonnes in July, its largest monthly addition since late 2023. July was also the 21st consecutive month in which the central bank reported a gold purchase.
By the end of July, China's official gold holdings stood at approximately 2,366 tonnes, equal to about 8% of its foreign-exchange reserves, according to the World Gold Council.
China's buying is significant because central-bank purchases can provide a relatively stable source of demand. Unlike short-term traders, central banks typically hold gold as part of their reserve-management strategy.
However, it would be inaccurate to say that Chinese central-bank buying is the sole reason behind the current rally.
Chinese Investors Are Buying Gold Too
The Chinese demand story extends beyond the central bank.
Chinese gold ETFs attracted approximately RMB 5 billion ($744 million) of inflows in July, lifting their total holdings by 5 tonnes to 282 tonnes. The World Gold Council also reported that Chinese gold ETFs had added around 8 tonnes during the first part of August, with inflows occurring on almost every trading day during that period.
For investors, this is an important distinction.
Gold prices can rise because central banks are buying, because institutional investors are adding exposure, or because individual investors are purchasing bars and coins. When several forms of demand strengthen simultaneously, the market can receive a much stronger underlying support.
China's Gold Imports Have Also Been Strong
China's physical gold demand has not been uniformly strong across every category, but imports have remained notable.
The World Gold Council reported that China's net gold imports reached 152 tonnes in June, the highest monthly level since March 2024. During the first half of 2026, China's net gold imports reached 764 tonnes, up 138% from the same period a year earlier.
That is a substantial increase.
At the same time, there is an important caveat: Chinese jewellery demand has remained relatively weak because high gold prices and softer consumer confidence are weighing on consumption. Shanghai Gold Exchange withdrawals fell 8% month-on-month to 80 tonnes in July.
So the Chinese gold market is not simply a story of consumers buying more jewellery. Investment demand and official-sector buying are playing a bigger role.
What About the US Federal Reserve?
The next major factor for gold could come from the US interest-rate outlook.
Markets are waiting for fresh US inflation data and Federal Reserve Chair Kevin Warsh's remarks at the Jackson Hole symposium. These events could influence expectations about future interest rates.
For gold, the relationship is relatively straightforward:
Lower expected interest rates → lower yields → potentially more attractive gold.
But the relationship is not mechanical. Inflation, geopolitical risks, the dollar and investor positioning can all override the effect of rates for periods of time.
That is why investors should watch the entire macroeconomic picture rather than relying on one indicator.
Gold ETF Buying Is Giving the Rally Another Boost
Another sign of improving investment demand is the recent movement in gold-backed ETFs.
Reuters reported that gold-backed ETFs recorded their strongest weekly inflows in 10 months, with approximately 46.7 tonnes added, worth about $6.4 billion. Most of the inflows came from North America and Europe.
This matters because ETF flows provide an indication of institutional investor appetite.
When gold prices rise alongside stronger ETF inflows, the rally has a broader demand base than a move driven purely by futures traders.
Why Gold Is Rising in India
Indian gold prices are influenced by international gold prices, the rupee-dollar exchange rate, import-related costs and domestic demand.
That means Indian investors can see gold prices rise even when the international move appears relatively moderate if the rupee weakens against the dollar.
On August 24, MCX October gold futures were reported around ₹1,63,120 per 10 grams in early trading.
However, investors should remember that MCX futures prices, IBJA benchmark rates and jewellery-shop prices are different benchmarks. Retail jewellery prices also include GST, making charges and dealer-specific premiums.
Is the Gold Rally Sustainable?
The immediate trend remains constructive, but that does not mean prices will rise every day.
Gold has already made a powerful recovery after falling sharply from its earlier 2026 record. A stronger dollar, rising Treasury yields or a more hawkish Federal Reserve could trigger profit-booking.
There is also a valuation issue. When gold moves rapidly higher, investors who bought at lower levels may decide to lock in profits.
On the other hand, continued central-bank purchases, strong ETF demand, geopolitical uncertainty and a weaker dollar could provide support.
The World Gold Council's latest China data also shows why the demand picture is mixed rather than uniformly bullish: official buying and investment flows are strong, while jewellery consumption remains under pressure from elevated prices.
What Should Gold Investors Watch Next?
For the next few weeks, investors should monitor:
US PCE inflation data
Federal Reserve policy signals
US Treasury yields
Dollar index movements
Chinese central-bank gold purchases
Chinese gold ETF flows
Global gold ETF inflows
Geopolitical developments
Rupee movement against the US dollar
MCX gold futures positioning
These factors will help determine whether the current three-month-high move develops into a longer rally or faces a period of consolidation.
The Bigger Picture for Indian Investors
The current gold rally is a useful reminder that gold prices are influenced by a global network of buyers.
China's central bank and investors are important, but they are only one part of the equation. The US dollar, American bond market, Federal Reserve expectations, global ETF flows and geopolitical risks are all interacting at the same time.
For Indian investors, this means domestic gold prices cannot be analysed only by looking at local jewellery demand.
Gold may remain volatile even if the long-term demand story remains supportive. Investors should therefore distinguish between a strong fundamental backdrop and a guaranteed price direction.
Conclusion
Gold has reached a more-than-three-month high, with international prices moving above $4,600 per ounce and Indian MCX gold trading around ₹1.63 lakh per 10 grams. The rally is being supported by a weaker dollar, lower yields, safe-haven demand and renewed investment flows.
China is an important additional factor. The People's Bank of China bought 20 tonnes in July, extending its buying streak to 21 months, while Chinese gold ETFs and imports have also shown strong investment demand.
The key takeaway is that China is helping strengthen the demand side, but the latest gold rally is being driven by several global factors at once. Investors should now watch US inflation, Federal Reserve signals, bond yields, the dollar and continued Chinese gold buying to judge the next move.
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This article is for informational and educational purposes only and should not be considered investment advice
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