Gold News

Gold Price Sets Record 8th Record in a Row Amid China 'Speculation and Hype' Warnings

GOLD set a record 8th new record price in a row against the US Dollar in London's bullion market on Tuesday, fixing above $2350 per Troy ounce as silver also extended its surge in terms of all currencies as authorities in No.1 consumer market China warned precious metals promoters against "beating drums and spreading rumors" amid the price jump. 
London's 3pm benchmarking last month saw a run of 6 new record gold price highs, only the 3rd such stretch ever, starting with a $50 jump from $2049.
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This latest run of new record gold highs then began before the long Easter weekend, taking the price of gold bullion in the world's central storage and trading hub 8.1% higher in 8 sessions.
Chart of gold priced in US Dollars, record London 3pm benchmarks. Source: BullionVault
"Gold boosted to new records as China beefs up reserves," says a headline at "smarter, faster" news site Axios.
The People's Bank of China said Monday it added 5 tonnes to its gold reserves last month, the smallest purchase so far in its now 17-month program of reported gold buying.
"Part of [gold's boom] is about investors looking for an inflation hedge as US job markets continue to be incredibly robust," claims a column at the Financial Times' website.
Inflation-protected US Treasury bonds ended yesterday offering new buyers of 10-year TIPS a real yield of 2.04% per annum, the highest in almost 4 months but half-a-point below last October's 15-year high.
"Gold prices have surged to a record high overnight as investors become increasingly worried about geopolitics and the economic outlook," claims Sky News Business in Australia.
Global stock markets rose Tuesday, taking the MSCI World Index back within 0.7% of end-March's new record high.
"As gold prices continue to rise," says the China Securities Journal, " funds continue to pour into related fields with the help of [Chinese] ETFs" – marking a stark contrast with continued outflows from gold ETFs listed on Western stock markets, which shrank by another 0.4% across March.
"Gold prices are high and trading is hot," says China's Securities Times, reporting how the AMC Gold Mining Equity ETF today fell 'limit down' for the 2nd day running after the promoter warned investors to beware the trust's large premium over the value of the gold-company stocks it holds, last week reaching almost 1/3rd after its own shares jumped 47.3% in 5 sessions.
"Not only is offline consumption booming" for gold coins and small bars in China – a surge starting last summer and running through Lunar New Year 2024 – "investors are also enthusiastic about investing in gold through mobile and online banking," says another STCN story, "as well as gold investment products on platforms such as Ant Fortune, Finance, and Tencent Financial Management Connect."
Even with London gold prices hitting fresh record highs on Tuesday, premiums for bullion landed in China – the precious metal's No.1 mining, importing, consumer and central-bank buying nation – hold around $45 per Troy ounce, offering new imports more than 5 times the typical incentive of the past 5 years. 
Shanghai premiums on silver over London quotes meanwhile rose to almost $3 per ounce – the highest since at least September 2023 – with Dollar prices then hitting new 35-month highs above $28.30 before dropping back 50 cents.
Silver priced in the Euro hit a 12-year high in London trade above €26 per Troy ounce, and the UK silver price in Pounds per ounce touched its highest since August 2020 at £22.30 before also dropping back.
Leveraged trading in Shanghai gold and silver futures contracts has leapt so far this month, averaging 31.6% more for gold each day than in March and 51.4% more in silver according to data from futures exchange the SHFE.
"Gold's new high this time is mainly driven by speculative capital," says China Securities Journal, quoting a fund manager. "Long [meaning bullish] transactions are gradually crowded."
"Against the background of gold's high popularity, many smaller gold-related funds have been subject to speculation recently, and investors should remain cautious," says another CS article.
"The momentum effect and 'short squeeze' after gold broke new highs may be the main reasons for gold steep gains," says Xiong Yuan, chief economist of Chinese brokerage Guosheng Securities, explaining that after gold prices hit a new record high in early March, speculators grew their bullish bets and began to cut their short positions, which "triggered heavy buying" in the derivatives market.
Looking ahead, the surge of Chinese investment capital into gold, which has now seen Shanghai's gold benchmarking auction set a record 8 records in a row, "fully reflects the market's optimistic expectations for fundamentals" in the market, says a note from asset managers Huaan Fund. 
"We are optimistic about the allocation value of gold in the medium to long term."

Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

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