Additionally, as China pushes to make its yuan currency a global competitor to the U.S. dollar, the country could stockpile bullion to bolster its reserves, potentially lifting gold markets as well. [China’s Currency Ambitions Could Lift Gold Market, ETFs]

Moreover, Beijing has relaxed rules on gold imports in April, allowing domestic miners that own assets overseas to ship in precious metals directly into China.

While China may be a major producer of gold, the country remains the world’s biggest importer of bullion. Song calculates that China’s gold demand is about three times that of its domestic gold production. According to the World Gold Council, Asia’s share of global gold demand could rise to 70% over the next three years from the current 60%.

SPDR Gold Shares

For more information on the gold market, visit our gold category.

Max Chen contributed to this article.