The Chinese are gobbling up gold despite its record-high price as U.S.-China trade tensions enter a fresh phase.
Geopolitical uncertainty is a key driver of gold prices, as investors turn to the metal as a safe haven.
This is especially evident in China, the world’s largest gold market, where prolonged stock market and property sector slumps have weighed on economic growth and fueled investor anxieties.
These uncertainties, coupled with a depreciating yuan, investment momentum and increased futures trading “all contributed positively to the stunning performance of the Chinese gold price,” Ray Jia, the World Gold Council’s research head for China, wrote in December.
Another factor was the Lunar New Year in late January and early February, which “sparked a good purchase rush” in the country, state media outlet the Global Times wrote.
Gold has been on a yearlong bull run, hitting new highs amid crises such as the wars in Ukraine and Gaza and expectations of Federal Reserve rate cuts. Bullion has surged to over $2,836 per troy ounce, marking a more than 38 percent increase from February 2024.
