25 April | Gold

China gripped by gold fever due to trade tensions with US

China gripped by gold fever due to trade tensions with US

The record gold rally seen in recent weeks is having a particularly strong impact on China, according to reports from Bloomberg. Gold has become the best-performing major commodity this year amid the Trump administration's aggressive trade policies that have sent shockwaves through global markets.

According to the agency, Asia has seen significant bursts of day trading and record moves in the asset prices in the yuan. At the same time, inflows into gold-backed exchange-traded funds continue to grow, along with an increase in retail activity and local premiums.

Trading volumes on the Shanghai Futures Exchange exceeded 1 million contracts per day in each of the last three trading sessions, surpassing normal levels, as reported by Bloomberg.

According to Samson Li, a Hong Kong-based analyst at Commodity Discovery Fund, the bull market in gold will last for a long time thanks to the Chinese investors seeking to hedge against geopolitical tensions. Some forecasters, including the country's oldest investment bank China International Capital Corp, expect the precious metal's price to rise to $5,000 an ounce, Li said.

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