Gold-trading frenzy hits China as tensions with US escalate

People's Bank of China added 2.8 tonnes of gold, while Goldman Sachs says prices will reach $4,000 per ounce in 2026

- Bloomberg

China saw an explosive surge in gold trading last week as the metal hit successive records and Sino-US trade tensions rose.

The Shanghai Futures Exchange saw trading volumes of the precious metal hit the highest level in a year last week. That was thanks to investors and industry players—refineries, traders, and retailers—that have ramped up hedging activities as global markets gyrate in response to trade policy changes in the US and China.

Demand for gold is strengthening, with investors seeking safety as a new trade war unfolds between the world's top two economies. The precious metal could reach $4,000 an ounce next year—about 25% above current levels—amid a wave of purchasing by central banks and recession risks, according to Goldman Sachs Group Inc.

The buying frenzy in China has seen prices move to a premium of around $20 an ounce over international prices, reversing a discount it saw for the majority of the past year when domestic demand was weak, according to Bloomberg calculations.