China’s central bank purchased gold for its reserves for a 17th straight month in March, extending a buying spree that has helped the precious metal surge to a record. The global price of gold has reached its highest levels as Chinese investors and consumers, wary of real estate and stocks, buy the metal at a record pace. Often considered a safe investment during times of geopolitical and economic turmoil, gold has soared in price in response to Russia’s invasion of Ukraine and the war in Gaza. But gold’s climb to highs above $2,400 per ounce has proven more resilient, and lasted longer, because of China. Chinese consumers have flocked to gold as their confidence in traditional investments like real estate or stocks has faltered. At the same time, the country’s central bank has steadily added to its gold reserves, while whittling away at its holdings of US debt. And throwing fuel on the fire are Chinese speculators betting that there is still room for appreciation. China already held considerable sway in gold markets. But the country’s influence has become more pronounced during this latest bull run — a nearly 50 percent increase in the global price since late 2022. It continued to scale new heights despite factors that traditionally make gold a comparatively less appealing investment: higher interest rates and a strong US dollar. Last month, gold prices vaulted higher even after the Federal Reserve signaled that it would keep higher interest rates for longer. And it has continued to appreciate even as the dollar has risen against almost every major currency in the world this year. Prices have pulled back to around $2,300 per ounce, but there is a growing sentiment that the gold market is governed no longer by economic factors but by the whims of Chinese buyers and investors. Watch Siddharth Zarabi, Managing Editor Business Today TV, in conversation with Juan Carlos Artigas, Global Head of Research, World Gold Council.
