Silver Falls, Gold Rallies as China Retail Investing Jumps, ETFs Sell

GOLD PRICES tried to rally again from 3-month lows in London trade Tuesday as silver struggled and new data showed retail gold investment demand in No.1 consumer nation China surging while Western gold-backed ETF funds continue to shrink.

More industrially useful, silver hit a fresh 11-month low at $52.68 per ounce in Asian trade overnight before rallying to reclaim last week-end's level $1.30 higher.

Trading around $3997 per troy ounce at this morning's 10:30 auction in London, gold fixed below $4000 for the first time since 20th July.

That level marked a new all-time high in September last year. Today the spot price of gold then rallied to $4030 per ounce, just topping Monday's rebound high.

"Domestic gold demand [in China] is increasingly running against the price trend, strengthening as prices fall [and offer] attractive entry points for long-term investors," Bloomberg News today quotes Zijie Wu, analyst at Jinrui Futures Co. in Hong Kong.

Now driven by Chinese households wanting investment gold rather than jewellery, this month's Golden Week holidays saw strong demand, the newswire says, while household demand for Gold Accumulation savings plans − primarily provided by commercial banks − has already beaten 2025's huge surge according to industry insiders reviewing data from central bank the People's Bank of China.

Gold ETF trust funds, in contrast, ended last Friday with the first weekly liquidation in a month as positive demand in Asia and especially Europe was more than offset by heavy selling of North American-listed trust funds according to data compiled and published by the mining industry's World Gold Council.

Needing 13 tonnes less gold bullion backing for the number of shares in issue, that marked the heaviest weekly outflow from gold ETFs worldwide since late-June saw the price of gold touch 8-month lows at $3945 per ounce, some 29.5% below end-January's all-time record high.

Both the giant GLD and IAU gold ETFs listed in New York shrank again Monday, now needing the least bullion to back their issues in issue in 10 and 6 weeks respectively.

With gold's rebound outpacing silver today, the Gold/Silver Ratio of the 2 formerly monetary metals' relative pricing rose to 74.3, the most silver for 1 ounce of gold since November last year.

China's stock market fell again on Tuesday, dropping back towards last week's new 14-month low on the CSI300 index.

South Korea's tech-heavy Kospi index meanwhile rallied more than 3% from yesterday's near 7-month low, but remained almost 1/5th lower for October so far.

New York's Nasdaq 100 index of tech stocks opened Tuesday higher again from Friday's 5-week low, but was still 3.3% lower from the end of September, with AI chip giant Nvidia down 5.6% for the month so far.

Most Western government debt prices rose, edging US, UK and German borrowing costs lower with so-called 'real' yields on inflation-protected US Treasury bonds falling to last Thursday's 1-month low of 2.64% per annum.

The 10-year TIPS rate peaked 0.3 percentage points higher at the start of October, offering investors the highest such inflation-protected yield on record outside of late-2008's Lehman Brothers' chaos.