With global banks' sudden turn to gold, the price of the yellow metal has skyrocketed, breaking previously set records. Gold is currently at $2,320, with trajectories pointing to strong price appreciation in the center.
The sudden rise in gold prices was mainly caused by the World Bank's XAU buying spree. The development has played a crucial role in boosting the gold price. But there is more than meets the eye.
It seems that China is a pioneer in this story, and not just in the plain old vertical policy perspective. Gold has become a popular metal in China, where ordinary households rely on it to stabilize their profits and returns over the long term.
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Chinese Investors' Obsession with Gold: What's Happening?
Chinese have been banking on the “exquisite yellow metal” lately, evident from the country's skyrocketing gold import statistics.
Chinese gold imports have skyrocketed since early 2024, driven by failing stock prices and the real estate market crisis the country is currently experiencing.
Per Wall Street Silver on X, the real estate sector meltdownscoupled with China's eroding stock market, is now forcing Chinese investors and citizens to hoard gold.
“While the real estate sector has been in crisis in recent years and China's stock markets are still in a bear market, the mainland's love for bullion has led to relentless purchasing by households.”
The platform quickly shared the figures, adding that China has imported nearly 2,800 tonnes of the yellow metal to date, surpassing all previously set records and thresholds in the area. The development further indicates that it is not just the banks that have purchased the precious metal in China; the average Chinese household is also benefiting from gold, driving its price to new highs.
“Over the past two years, overseas purchases totaled more than 2,800 tonnes – more than all the metal backing exchange-traded funds around the world. So it's not just central banks buying the shiny yellow metal, but also cash-rich Chinese HHs.”
Gold will undergo further correction?
Analysts at X predict that new price milestones for gold will be exceeded this year. Rashad Hajiyev, a leading financial analyst, said the precious yellow metal will correct its price slightly ahead of the US session.
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Hajiyev later explained how miners can also play a crucial role in driving up the price of the yellow metal. According to the analyst, gold could cross the $2,375 price milestone in the coming months.