Gold finally reached $4,000 an ounce: why it makes sense that it happened in Asian trading

By Jules Rimmer

Spot gold reached $4,000 early Wednesday after futures hit landmark price on Tuesday

Asian buyers are increasingly responsible for driving the trading in gold

When the spot price of gold finally pierced the $4,000 per ounce milestone in the early hours of Wednesday morning, it was both unsurprising and appropriate that it should happen in Asian trading.

Because, as Ross Norman, the chief executive of Metals Daily, points out, Asia is where the action is right now in gold trading.

Spot refers to the price for immediate delivery and settlement, as opposed to the futures contract (GC00) that reached the $4,000 milestone on Tuesday.

For Norman, Indian buyers are the most price-sensitive but most unusually imports there doubled in September and prices commanded a $10 premium to those in physical storage in the U.K. Chinese demand, after briefly dipping in early September, surged once again and Shanghai prices commanded a $5 premium to London.

China's appetite for gold remains robust , despite record prices

The Metals Daily bulletin highlighted that the center of gravity for gold globally is shifting toward the East. BRIC nations are determined to insulate themselves from what they perceive as the weaponization of the dollar DXY and fortifying their own institutions in preparation. Gold is viewed by the new geopolitical nexus of China, India and Russia as "a necessary backstop to provide credibility and confidence for these structures," says Norman.

The purchases of gold in the East is, Norman suggests, also a direct response to the imposition of sanctions on Russia and the seizure of $300 billion of Russian assets held overseas. Central banks have been buying gold consistently in recent years, as China just clocked up its eleventh consecutive month of net purchases, and many of them are anxious to repatriate these physical reserves to their own storage vaults.

A survey of central banks conducted by Invesco revealed that 68% of them now hold gold physically themselves, versus just 50% in 2020. Three quarters of respondents signalled their intention to follow suit by 2028.

-Jules Rimmer

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10-08-25 1010ET