On Monday, April 21, the price of gold reached a historic high for the third consecutive trading day, especially during the Asian trading session. Due to the escalating tensions between China and the United States, Chinese investors rushed towards the “stateless” safe-haven asset, gold, resulting in a significant increase in the gold price.
The price of New York gold futures broke through $3,400 per troy ounce for the first time that day, briefly exceeding $3,440. Following the Easter holiday, funds switched from neutral positions to buying.
Amid a series of record highs, the volatility of gold prices during the Asian trading session was particularly pronounced, with gold prices typically hitting peaks between 6 am and 3 pm Beijing time this month. As of 9:00 pm Beijing time on the 21st, spot gold surpassed $3,410 per ounce, COMEX gold surpassed $3,424 per ounce, and Shanghai gold surpassed $811 per gram, all reaching new historical highs.
According to a report by Nikkei Asian Review, Bruce Ikemizu, Chief Executive Officer of the Japan Bullion Market Association and precious metals expert, stated that “strong buying pressure from China is driving up the price of gold.”
As of Monday, the Shanghai Gold Exchange settled approximately 832 tons of gold in April, exceeding the annual volume of 780 tons in March.
“So far, when gold prices reach record highs, actual demand for gold typically decreases,” said Tsutomu Kosuge, head of the Japanese research company Marketedge. Kosuge pointed out that there are currently “no apparent sellers,” leading to the continued rise in gold prices.
Since March 28, the Shanghai spot gold price has consistently been higher than the international spot benchmark – London. On April 10, the price difference reached $51 per troy ounce. From January to March, the average price difference was $2.50.
Against the backdrop of ongoing tensions between China and the United States, the demand for physical gold in China has remained strong. In February this year, in major cities like Beijing and Shanghai, many people lined up to buy gold despite subzero temperatures, queuing as early as 4 am, with reports of gold shops opening more than 2 hours earlier, already numbering over 200, with people from other provinces also traveling to buy gold, lining up with suitcases, with waiting times ranging from 5 to 7 hours, all in an effort to secure gold for value preservation.
On April 9, U.S. President Trump announced a 90-day suspension of retaliatory tariffs from other countries, while further increasing tariffs on Chinese imports to 145%. In response, China took retaliatory measures, with both countries’ tariffs on each other’s goods now exceeding 100%.
China further retaliated by demanding airlines to stop buying planes and parts from Boeing. Koichiro Kamei, Director of the Japan Market Strategy Institute, stated, “The prospect of a foreseeable agreement between China and the United States is dim, increasing the demand for stateless assets like gold.”
Apart from Chinese rush for gold, on Monday, President Trump once again urged the Fed to lower interest rates. Last week, speculations about the possible dismissal of Jerome Powell, Chairman of the Federal Reserve, also sparked increased interest in gold purchases. On April 20, Trump expressed insights on negotiation and success on social media, stating that “whoever owns gold sets the rules” as the golden rule, believed to be one of the reasons driving up gold prices.
Looking ahead, gold prices may continue to rise for a period of time. “At present, we cannot anticipate a significant pullback,” said market analyst Itsuo Toshima.
James Steel, Chief Precious Metals Analyst at HSBC, stated that even if gold prices decline, central banks worldwide will increase their purchases, thereby supporting the market.
According to data released by the World Gold Council, central banks purchased 1,045 tons of gold in 2024, exceeding 1,000 tons for the third consecutive year, which is significantly higher than the long-term average of central bank gold purchases.
Fueled by increased central bank demand, the total global gold demand in 2024 reached a staggering 4,975 tons, setting a new historical high. Coupled with the overall high levels of gold prices, the total gold demand in 2024 amounted to a substantial $382 billion.