In April, China's gold market performed extremely well as prices, physical and investment demand surged amid the country's trade standoff with the US. However, as head of China research at the World Gold Council (WGC) Ray Jia warns, demand in the country could weaken as tensions between the world's leading economies subside.
Jia pointed to a continued rise in global gold prices in April, including the Chinese market. A weaker dollar, heightened geopolitical and economic uncertainty, as well as significant inflows into gold ETFs have boosted the precious metal's prices.
However, as Jia warned, demand for Chinese ETFs will slow significantly in May compared to April, although it is expected to remain strong. The decline in investment demand for gold in China may abate amid profit taking, price volatility, and easing trade tensions between the US and China.
Nevertheless, in the long term, the precious metal market will still be supported by strong performance, continued global economic risks, and investment from Chinese insurers, Jia concluded.