Will China’s Latest Gold Rush Push Prices To Another All-Time High?

Phil Carr
Published: Feb 2, 2024, 19:27 UTC

Interestingly, Gold priced in multiple currencies including British Pounds, Euros, Australian Dollars, Chinese Yuan and Japanese Yen hit fresh all-time record highs this week.

Gold and silver bullion, FX Empire

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China’s Precious Metal Frenzy Amid Economic Meltdown and Global Uncertainty

Precious metal prices have made an explosive start to February, surging to one-month highs as China’s latest rush to Gold sparks fresh buying frenzy.

According to data tracked by GSC Commodity Intelligence – Chinese Investors, households and banks have been piling into Gold at one of the fastest paces seen since the Global Financial Crisis as the country’s stock market and real-estate sector continues to sink deeper into economic meltdown.

Together with blistering demand from central banks, China’s bullion binge helped push the price of Gold to all-time record highs in December and has kept prices firmly above $2,000 an ounce this year – ultimately setting a new floor for the market.

The rush toward the safe haven metal marks the uncertainty around China’s financial health. China’s market mayhem has dragged the country’s benchmark CSI 300 equity index down more than a fifth over the past year, while the value of new home sales among the country’s biggest developers has fallen 35% from a year earlier.

China’s stock market hasn’t just had a bad start to 2024. It’s been rough going since February 2021, when the market reached its peak. Over the past three years, around $6 trillion – equivalent to roughly twice Britain’s annual economic output has been wiped off the value of Chinese stocks.

The astonishing losses, reminiscent of the last Chinese stock market crash of 2015-2016, highlight a growing crisis of confidence among investors concerned about the country’s future. Even foreign investors have now pulled out almost 90% of the money they invested in Chinese stock market right back out.

During times like these, finding a safe place to store money becomes particularly important, which would explain why Gold exposure has become a crucial necessity for investors everywhere.

China’s Gold Rush: Predicting Record Highs for USD Priced Gold

To quote analysts at GSC Commodity Intelligence – mounting evidence shows that we are now in a “new era” for Gold. China’s bullion buying spree simply represents, yet another bullish tailwind for precious metal prices – alongside all the other macro and geopolitical events currently unfolding.

Interestingly, Gold priced in multiple currencies including British Pounds, Euros, Australian Dollars, Chinese Yuan and Japanese Yen hit fresh all-time record highs this week.

The big question now is will Gold price denominated in US dollars be next to hit fresh all-time record highs?

Analysts at GSC Commodity Intelligence believe it’s not a question of ‘if’ but ‘when’. In fact, you just have to take a look at what happened in 2023.

Last year, Gold priced in multiple currencies set new all-time highs by an average of 13.7 weeks prior to Gold price denominated in US dollars. If this is a leading barometer for predicting the performance of Gold prices as a whole, then this ultimately means one thing.

Higher Gold prices are coming! That’s welcoming news for the bulls, but painful for anyone sitting on the sidelines, who must now decide how much FOMO they can handle.

Commodity Price Forecast

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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