China in a Frenzy for Gold, Up 45% Since 2022

China’s citizens and central bank are buying gold at a record pace, driving the metal’s price rally higher. Gold has surged 45% since September 2022, reaching $2,390.35 on April 17, 2024. Factors contributing to this surge include persistent inflation in the U.S. and Europe, economic uncertainties related to conflicts in Europe and Asia, and limited investment alternatives in China.
Chinese demand for gold has remained strong despite higher interest rates and a strong U.S. dollar. The People’s Bank of China has been increasing its gold reserves for 17 consecutive months, aiming to diversify its funds and reduce reliance on the U.S. dollar. Other central banks have also been increasing their gold holdings in response to geopolitical uncertainties.