Major Chinese gold enterprises demonstrated strong overseas capacity expansion in the first quarter of 2026, producing 24.17 metric tons of mined gold abroad, a robust 30.77 percent increase that helped stabilize overall supply chains, according to the China Gold Association.

Output from imported raw materials also grew 2.94 percent to 55.165 tons during the same period, as Chinese enterprises actively diversified their resource channels to buffer against domestic supply constraints and maintain the overall resilience of the nation's gold supply chain.

Zhao Xiangbin, chief strategist at Beijing Gold and Forex Fortune Investment Management, said that Chinese companies' expansion into overseas markets has transitioned from a growth strategy to a structural necessity in recent years.

For a country that reigns as the world's largest gold consumer, increasing overseas production by major Chinese mining firms demonstrates that their proactive offshore M&A strategy is already acting as a vital shock absorber, effectively securing the physical supply chain against domestic shortfalls, said Zhao.

Acquisitions like Zijin Mining's recent moves in Africa underscore a highly calculated approach to securing this long-term supply, he said.

"By targeting resource-rich but often under-capitalized regions, Chinese enterprises are acquiring high-quality assets at competitive valuations while bringing their advanced extraction technologies and capital to the table," said Zhao.

"This geographic diversification is absolutely essential for supply chain security, insulating China's broader gold supply from localized geopolitical risks, trade bottlenecks or regional regulatory shifts, creating a much more resilient and globally distributed asset base."

Zhao believes by locking in physical mining assets and controlling the upstream supply chain on a global scale, Chinese mining giants are strategically anchoring the nation's physical gold reserves and steadily enhancing China's long-term influence over global precious metal supply dynamics.

Highlighting the strategic importance of the precious metal at a macroeconomic level, the People's Bank of China, the country's central bank, continued its long-term accumulation strategy, adding 7.15 tons to its gold reserves in the first quarter.

As of the end of March, China's total gold reserves stood at an impressive 2,313.48 tons, pushing the nation one spot higher to the world's fifth-largest holder of the precious metal. This marks the 17th consecutive month of reserve expansion dating back to November 2024, signaling a sustained effort to diversify the nation's official reserve assets and bolster financial security, said the association.

This push for supply security comes as China's domestic gold market witnessed a significant structural shift in the first quarter of 2026, as record-high global prices triggered a massive surge in investment demand while simultaneously depressing traditional jewelry consumption.

The country's total gold consumption reached 303.29 tons from January to March, representing a steady 4.41 percent year-on-year increase, according to latest data released by the association.

However, this headline growth masked a sharp behavioral divide among consumers. While the consumption of gold bars and coins skyrocketed by 46.4 percent to reach 202.062 tons, demand for gold jewelry plummeted 37.1 percent to 84.62 tons, it said.

Sustained high and intensely volatile international prices have increasingly deterred typical retail shoppers while igniting a buying frenzy through banking and investment channels.

Trading volume of all gold futures and options on the Shanghai Futures Exchange rose 22.08 percent to 33,800 tons, with turnover soaring 86.18 percent to 28.41 trillion yuan, it said.

zhengxin@chinadaily.com.cn