Daily closing gold price reported by the London Bullion Market Association (LBMA)

China's Demand Pushes Gold Above $2,400, Forecast to Hit $2,700

Apr 22, 2024, 02:19 AM

China's significant role in the global gold market has intensified as the country's unrelenting demand continues to drive gold prices to record highs. Over the last two years, China's overseas gold purchases have surpassed 2,800 tons, exceeding the total metal backing ETFs globally and constituting about a third of the stockpiles held by the US Federal Reserve. This surge in demand has pushed gold prices above $2,400 an ounce, with the premium for Chinese importers reaching $89 per ounce at the start of April, a substantial increase from the previous year's $35. The Chinese central bank has been particularly active, buying gold for 17 consecutive months. This robust demand comes amid a broader context of rising commodity prices and concerns over currency devaluation, with China also increasing its imports of other commodities like copper. Goldman Sachs has raised their gold price forecast to $2,700 per ounce by year's end, highlighting the impact of increased central bank demand and retail interest. Since 2020, gold has appreciated by over 30%.