China isn't just buying gold—it's hoarding it. Trading volumes on the Shanghai Futures Exchange just exploded to their highest in a year, fueled by a stampede of investors, refiners, and even banks hedging against rising geopolitical heat. A new trade war is brewing between the US and China, and domestic buyers are treating gold like a strategic weapon. Prices in China are now commanding a $20 premium over global rates—a complete U-turn from last year's discount era when demand slumped.
The People's Bank of China quietly added another 2.8 tons to its reserves in March—its fifth straight month of buying. Sound familiar? It should. The last time this happened was during Trump's first trade war. But this time, the wave is broader. Retail investors are smashing ETF records, pouring in $1.7 billion last week alone. According to State Street's Aron Chan, this demand is more than just a short-term play—it's sticky, cultural, and resilient. Add to that gold accumulation plans from major banks and surging demand for investment bars, and you've got a multi-layered bid that doesn't flinch.
And it's not just about diversification anymore—it's about survival. Treasuries are losing their haven halo as trust in dollar-denominated assets cracks. Goldman Sachs (GS, Financial) now sees gold hitting $3,700 by year-end, possibly even touching $4,000 by mid-2026. Vasu Menon at OCBC says it plainly: if China wants out of the dollar trap, it'll buy more gold—and fast. For global investors, the message is clear: when the world's second-largest economy treats gold like an economic defense system, you pay attention.
