Easter Weekend Sees $3300 Gold Tumble from Fresh 'China Frenzy' High
Thursday, 4/17/2025 16:12
GOLD PRICES tumbled into Easter Weekend on Thursday in London, falling back through $3300 per Troy ounce after setting fresh record highs yet again during today's Asian trade in what pundits and journalists are calling a Chinese gold investment "frenzy".
Now imposing import tariffs of up 145% on America's No.1 trading partner and facing 125% tariffs return, US President Donald Trump meantime said that he can't wait to sack Federal Reserve chief Jerome Powell for not cutting Dollar interest rates even as
the US-China trade war risks crushing the Dollar and driving up inflation.
With London now shut until Tuesday, spot prices in the world's central gold bullion market fell $50 per Troy ounce by the time of the City's 3pm benchmarking auction compared to this morning's new all-time high of $3357.
That cut gold's Easter Week 2025 price surge to 2.3% in US Dollar terms and pulled the precious metal back below $3300.
Gold in Shanghai had earlier risen 1.1% in Chinese Yuan, gaining for the 8th session running and setting its 6th consecutive new all-time high at the city's 2.15pm benchmark.
That jump kept the premium offered to new gold shipments from London into the precious metal's No.1 mining, importing, central-bank buying and consumer nation above $20 per Troy ounce, well over twice the typical incentive.
"China's gold market investment boom continues in March," said the mining industry's World Gold Council
in a new blog Tuesday.
"Gold-trading frenzy
erupts in China as tensions with US escalate," said global data service and news-wire Bloomberg the same day, also reporting that Beijing's financial authorities are issuing more gold import licenses than usual to help commercial banks meet the surge of investor demand.
"Chinese demand has...been [further boosted] by a pilot program that allows insurance funds to invest in gold," Bloomberg goes on, "part of efforts to optimize their asset allocations.
"Inflows to onshore bullion-backed ETFs, driven by retail investors, have also been unusually strong."
Gold ETFs listed on China's stock exchange and backed by metal held inside the world's 2nd largest economy already saw booming demand drive the size of their shares in issue 5.8% higher in March, data from the WGC says.
With Beijing clamping down on speculative products during
last spring's Chinese gold boom, ordering commercial banks to suspend new account openings, the country's gold ETFs have more than doubled in size as a group since March 2024.
But led by the Huaan Yifu (SHA:518880) and Bosera gold ETFs (SHZ: 159937), China's exchange-traded gold trust funds still account for barely 4.0% of the bullion needed to back gold ETF products worldwide.
US-listed products led by the giant SPDR Gold Trust (NYSEArca: GLD) and iShares Gold product (NYSEArca: IAU) have meantime swollen by more than 1/8th over the past 12 month in terms of shares in issue.
US
gold ETFs have also grown to need 51.8% of the world's total exchange-traded gold product backing − the highest proportion since New Year 2021 − as Western Europe's share falls back after prolonged profit-taking on last year's then-record high gold prices.
"While western investors have continued to dominate global ETPs," says the latest weekly report from specialist analysts Metals Focus, "demand from China and India has ramped up rapidly."
But as Chinese gold investment soars, and "despite the upcoming May Labour Day holiday sales boost, record high gold prices and economic worries are clouding the jewellery demand outlook," says WGC analyst Ray Jia, "though safe-haven buying may offer a cushion."
Retailers in gold No.2 consumer-nation India are meantime having to offering discounts of more than $50 per Troy ounce compared to the duty-and-tax paid price of new imports.
"Gold prices eye Rs 1 lakh mark by Akshaya Tritiya," says the Economic Times of India, pointing to the end-April festival now widely associated with buying gold as an auspicious investment but set for weak demand in 2025.
Like China, in contrast, neighboring Vietnam is
also seeing a surge of demand, VN Express reports, with would-be buyers having to take tickets to queue for 3 hours outside jewellery stores in Hanoi.
"Gold has proved to be the most profitable asset in Vietnam so far this year," says the report, "with a 40% gain as of Thursday.
"But the price rise caused more people to buy than sell," forcing stores to limit the size of each customer's purchases before shutting early and putting up "out of stock" signs.
"Employees are unable to say when more stocks will arrive."
Back in London, silver bullion's benchmark midday auction fixed around $32.33 per Troy ounce on Thursday, putting the more industrially-useful precious metal at
Depression-era lows in terms of 'safe haven' gold.
Gold in Euros meantime sank 1.5% from this morning's fresh Chinese-hours record of €2953 per Troy ounce by the time of London's 3pm fix, cutting its Easter Week gain to 2.4%.
That was twice the weekly gain for
the London gold price in UK Pounds per ounce, which sank over £50 from Thursday's new record high of £2540 as the City shut up shop for the long Bank Holiday weekend.
Western stock markets also rose for the week, with Thursday's drop in UK and European shares leaving the EuroStoxx 600 index 3.6% higher from last Friday's finish, while New York's S&P500 index added 0.5% from last weekend's 12-month low.
"Our role is to make sure [that US trade tariffs] will be a one-time increase in prices and not something that turns into an ongoing inflation process," said US Fed chair Jerome Powell on Wednesday.
"Powell's termination cannot come fast enough!" Trump then said on his TruthSocial platform today, contrasting "Too Late Jerome Powell of the Fed" with the European Central Bank, which again cut its key interest rates as expected on Thursday, citing "rising trade tensions...increased uncertainty...[and] a tightening impact on financing conditions [likely to] further weigh on the economic outlook."
New York gold futures also tumbled as the long Easter weekend began on Thursday, dipping through $3300 on the most-active June contract − a level breached for the first time in history as Asian trading began Wednesday − and cutting its gap above London spot bullion quotes to around $15 per Troy ounce.
While London's bullion market is now shut until Tuesday, the Shanghai Gold Exchange and the SHFE derivatives market will open as usual on Friday, while electronic trading in US Comex futures and options will recommence with Monday's start to Asian financial hours.
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