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Julie Zhang

Asian markets are a growing force in gold price discovery as the metal remains sensitive to heightened geopolitical concerns and abrupt shifts in investor sentiment, according to the World Gold Council.
Asian trading hours have been a key driver at gold price rebounds during the first half of the year, while the pullbacks tended to occur when US markets were open, according to the council’s global midyear outlook report published on July 1.
“It … showcased the growing relevance of Asian markets in gold price discovery,” the industry body’s analysts said in the report.
The global gold ETF flows tell the story, said Ray Jia, research head of Asia-Pacific ex‑India at the council. “In the US, higher yields and rate expectations amid sticky inflation have led investors to trim their gold ETF holdings.
“In Asian countries such as China, India and Japan, gold ETF demand was driven by other reasons including but not limited to geopolitical risks, local gold price strength, local currency weakness etc.,” Jia said.
The trend comes as emerging-market central banks, including China’s, have continued adding gold to diversify their reserve assets. China’s investment demand for gold in the first quarter surged 67 per cent from a year earlier, a separate report by the World Gold Council showed.
The gold price is expected to have upside potential in the second half of this year, even after dropping to around US$4,000 per ounce as of June 26 following a surge to 12 all‑time highs in late January amid the Middle East turmoil, the report said.


A fresh geopolitical shock, a shift towards lower interest-rate expectations and a wave of long-term investor participation could push the metal price to around US$4,500 per ounce, but only “a strong, clear signal” may push it towards US$5,000 per ounce.
The market expects the US Federal Reserve to increase rates at least once before the end of the year.
A survey conducted by the World Gold Council earlier this year found that a growing number of central banks expect their gold reserves to increase over the next 12 months.
If central banks increase their gold holdings by 20 to 25 tonnes above recent norms, that could lift the gold price by about 1 per cent, according to the report.
India, the world’s second largest gold market after China, could also weigh on the precious metal’s prices in the coming months after the government raised import duties sharply and moved to curb consumer purchases, the council said.
The World Gold Council is not alone in betting on a gold price recovery.
“The precious metals are facing a US Federal Reserve that is much more concerned about inflation than previously thought … turning investors from buyers to sellers,” said Carsten Menke, head next generation research of Julius Baer, in a note on June 25.
“We expect gold to regain lost ground, even though record highs will remain out of reach for now.”


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The trend reflects a ‘growing relevance’ of Asian markets, while US investors pull back on gold holdings due to higher rates, inflation


The trend reflects a ‘growing relevance’ of Asian markets, while US investors pull back on gold holdings due to higher rates, inflation.


‘Upside potential’: World Gold Council counts on Asian buyers to curb price plunge

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The trend reflects a ‘growing relevance’ of Asian markets, while US investors pull back on gold holdings due to higher rates, inflation

The trend reflects a ‘growing relevance’ of Asian markets, while US investors pull back on gold holdings due to higher rates, inflation