{"id":37999,"date":"2025-12-31T15:33:49","date_gmt":"2025-12-31T07:33:49","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=37999"},"modified":"2025-12-31T15:33:49","modified_gmt":"2025-12-31T07:33:49","slug":"gold-hits-record-highs-how-china-is-shaping-the-next-move","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/featured\/gold-hits-record-highs-how-china-is-shaping-the-next-move\/","title":{"rendered":"Gold Hits Record Highs: How China Is Shaping the Next Move"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/ray_yang_banner_mobile-1024x559.png\" alt=\"\" class=\"wp-image-38001\" \/><\/figure>\n\n\n\n<p>In the final quarter of 2025, gold once again reached new heights. After a steady climb through Q3, the metal entered a <strong>high-volatility, high-momentum phase<\/strong>, hitting a record <strong>US$4,380 per ounce<\/strong> in mid-October before undergoing a brief technical correction to around <strong>US$3,900<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"865\" height=\"564\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/e01226dd-c89c-4b15-ae13-5fdcf796ee00.png\" alt=\"\" class=\"wp-image-38002\" \/><\/figure>\n\n\n\n<p><em>Source: MacroMicro<\/em><\/p>\n\n\n\n<p>By late December, gold had not only recovered but surged further, approaching <strong>US$4,550 per ounce<\/strong> and marking an <strong>annual gain of more than 70%<\/strong>.<\/p>\n\n\n\n<p>This powerful rally was driven by a mix of structural factors:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Rising safe-haven demand<\/strong> amid U.S. credit concerns.<\/li>\n\n\n\n<li><strong>China\u2019s rare earth export restrictions<\/strong> triggered supply anxieties.<\/li>\n\n\n\n<li><strong>Looser U.S. monetary policy<\/strong>, which reduced the opportunity cost of holding gold.<\/li>\n<\/ul>\n\n\n\n<p>Together, these forces created a wave of capital inflows into precious metals, making Q4 one of the strongest quarters for the asset class in recent years.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">China\u2019s Role in Gold\u2019s Upswing<\/h2>\n\n\n\n<p>China has played a critical role in shaping gold\u2019s recent trajectory. In early Q4, Beijing announced an expansion of export controls on rare earths and strategic minerals, a move widely interpreted as a response to U.S. semiconductor restrictions. This escalation added a new layer of uncertainty to already fragile global risk sentiment.<\/p>\n\n\n\n<p>Against this backdrop, gold benefited from its status as a hedge against geopolitical confrontation and trade fragmentation. Although short-term pullbacks occurred as markets digested the news, the broader bullish structure remained intact \u2014 a signal that demand was being driven by strategic allocation rather than reactionary flows.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"865\" height=\"487\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/a867b914-f6f2-43b2-80b1-3b0b091493ab.png\" alt=\"\" class=\"wp-image-38003\" \/><\/figure>\n\n\n\n<p><em>Source: Goldhub.com<\/em><\/p>\n\n\n\n<p>According to <strong>WCG data<\/strong>, global central banks made <strong>net gold purchases of 53 tonnes in October<\/strong>, a <strong>36% increase month-on-month<\/strong>, marking the highest single-month total of 2025. The year\u2019s cumulative net purchases reached <strong>254 tonnes<\/strong> \u2014 slightly slower than in the past three years, but still underscoring gold\u2019s growing strategic importance.<\/p>\n\n\n\n<p>China played a crucial role. The <strong>People\u2019s Bank of China<\/strong> has increased its gold reserves for <strong>13 consecutive months<\/strong>, reinforcing the metal\u2019s role as a hedge against uncertainty.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">China\u2019s central bank added to its gold reserves for a 13th straight month, according to data released on Sunday <a href=\"https:\/\/t.co\/XmBDv0umLF\">https:\/\/t.co\/XmBDv0umLF<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1997498462846308442?ref_src=twsrc%5Etfw\">December 7, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Meanwhile, <strong>gold ETFs<\/strong> attracted strong inflows, with November alone seeing a net <strong>US$5.2 billion<\/strong> added globally \u2014 the sixth straight month of growth. Total assets under management climbed to a record <strong>US$530 billion<\/strong>.<\/p>\n\n\n\n<p>Asia contributed <strong>US$3.2 billion<\/strong> of those inflows, of which <strong>China accounted for US$2.2 billion<\/strong>, highlighting the country\u2019s growing appetite for gold investment amid geopolitical tension and robust private demand.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Looking Ahead in 2026: A More Mature Bull Cycle<\/h2>\n\n\n\n<p>Looking ahead to 2026, gold remains in a <strong>structural bull market<\/strong>, though the pace of gains is likely to moderate. Periods of consolidation or technical pullbacks may occur, especially after such a steep rally in 2025.<\/p>\n\n\n\n<p>China\u2019s long-term accumulation strategy is expected to continue. The <strong>People\u2019s Bank of China<\/strong> now holds the <strong>sixth-largest gold reserves globally<\/strong>, but gold still represents <strong>only around 10% of its total foreign reserves<\/strong>, compared to roughly <strong>70% for the U.S., Germany, and France<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"367\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/image-16-1024x367.png\" alt=\"\" class=\"wp-image-38000\" \/><\/figure>\n\n\n\n<p><em>Source: gold.org<\/em><\/p>\n\n\n\n<p>Analysts at <strong>Goldman Sachs<\/strong> and <strong>J.P. Morgan<\/strong> believe this accumulation has evolved into a <strong>long-term strategic policy<\/strong>, with consistent monthly purchases likely to persist through 2026, providing a <strong>natural floor for prices<\/strong> during downturns.<\/p>\n\n\n\n<p>J.P. Morgan also notes that <strong>large Chinese insurers and institutional investors<\/strong> are reallocating capital into gold, potentially injecting <strong>billions of dollars in liquidity<\/strong> into the global market.<\/p>\n\n\n\n<p>In the U.S., the <strong>2026 midterm elections<\/strong> are expected to drive volatility.<\/p>\n\n\n\n<p>Historically, election years coincide with rising <strong>VIX levels<\/strong>, as investors trim exposure to risk assets and seek refuge in defensive holdings such as gold. This could serve as a <strong>key catalyst<\/strong> for another upward leg in prices.<\/p>\n\n\n\n<p>However, there are risks to monitor. If the U.S. economy posts stronger-than-expected growth early in 2026, <strong>rate-cut expectations may be delayed<\/strong>, prompting short-term corrections in gold.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">What Traders Need to Know<\/h2>\n\n\n\n<p>This gold cycle is being driven less by short-term macro surprises and more by long-term structural change. Central banks are redefining gold\u2019s role within reserves, China is using it as a strategic hedge against geopolitical and financial risk, and institutional investors are embedding it into portfolio construction rather than treating it as a tactical trade.<\/p>\n\n\n\n<p>For traders, this means gold may behave differently than in past cycles.<\/p>\n\n\n\n<p>Volatility is increasingly shaped by policy signals, geopolitical developments, and capital allocation trends rather than traditional inflation or currency drivers alone.<\/p>\n\n\n\n<p>Understanding these forces is critical to contextualise market moves, manage risk effectively, and align trading strategies with the evolving role of gold in the global financial system.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">Disclaimer<\/h3>\n\n\n\n<p><em>The views and opinions expressed in this article are those of <\/em><em><strong>Ray Yang<\/strong><\/em><em>, Market Analyst at VT Markets. They reflect his professional analysis and insights on current market conditions and do not necessarily represent the official position of <\/em><em><strong>VT Markets<\/strong><\/em><em>. This commentary is provided for informational purposes only and should not be construed as financial advice.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>After a steady climb through Q3, gold entered a high-volatility, high-momentum phase,. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":38001,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[25,28],"tags":[29],"class_list":["post-37999","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-learn","tag-learn"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=37999"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37999\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/38001"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=37999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=37999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=37999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}