- Growing Demand from China: After a brief holiday pause, China has returned to the gold market with strong appetite, significantly lifting global demand and contributing to rising prices.
- Central Bank Activity: The People’s Bank of China (PBoC) has been steadily increasing its gold holdings, according to Yahoo Finance. This move reflects a larger global shift by central banks to reduce reliance on the US dollar.
- Safe-Haven Appeal Amid Trade Tensions: Ongoing US-China trade tensions have added uncertainty to the markets, encouraging investors to seek the relative safety of gold.
- All-Time Highs: Gold prices have soared to new records this year, fueled by Chinese demand and global concerns tied to the trade dispute.
Analyst Outlook: Some experts believe gold has room to run, with forecasts reaching up to $4,000 per ounce, citing strong Chinese demand and geopolitical pressures as key drivers.
Last month, China recorded its highest gold imports in nearly a year—even as prices reached record territory—thanks to intense domestic demand and eased import controls from the central bank.
Imports totaled 127.5 metric tons in April, an 11-month high, customs data showed Tuesday. That figure marks a 73% increase from March, despite gold hitting all-time highs, briefly touching $3,500 per ounce.
The surge is likely linked to new import quotas issued by the PBoC to select commercial banks in response to growing interest from both retail and institutional investors. The central bank, which controls bullion flows, typically approves import rights for only a few banks.
Chinese investors are turning to gold as a hedge against escalating global risks. This demand helped fuel the metal’s dramatic rally earlier in the year. While prices have dipped slightly in May on hopes for trade resolution, ongoing central bank buying and diversification away from the dollar are expected to keep prices supported.
Bottom line: China's renewed focus on gold—from central bank stockpiling to robust consumer demand—is playing a critical role in driving prices higher, alongside broader concerns over global economic uncertainty and trade instability.
