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Gold Fever: China’s Investors Spark a Price Rally

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Since the end of last year, the price of gold has been hitting record highs daily, sparking increased interest in gold-related investments.

News1

Searching for today’s gold and gold prices has become a daily routine.

However, according to a News1 report on the 24th, citing the British daily Financial Times (FT), the gold price rally may be rooted in China.

On the 23rd (local time), the number of gold futures contracts held by traders at the Shanghai Futures Exchange (SHFE) was 295,233, equivalent to 294 metric tons (324.6 US tons) of gold.

This figure is almost a 50% increase from before the conflict between Israel and Hamas last September.

Particularly last week, gold trading volume exploded to record 1.3 million contracts, surpassing five times the average last year.

This surge is attributed to the combined effects of emerging central banks’ increased gold purchases to move away from the U.S. dollar and the preference for safe assets due to geopolitical unrest.

Indeed, the price of gold has risen by 40% since November, soaring to $2431 per ounce last week.

One of the main reasons for this rally is the large influx of Chinese investors into the gold futures market due to the real estate and stock market stagnation.

Meanwhile, there has been a noticeable outflow of gold trading funds from U.S. and European exchanges.

John Reade, senior analyst at the World Gold Council (WGC), evaluated that “Chinese speculators are wielding significant influence in the gold market.”

He further analyzed that speculative funds from emerging markets have reached a stage where they can influence the ‘gold price.’

News1
 
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