Shanghai, China (Agencies): In a dramatic shift, China has moved from aggressive gold buying to near-record liquidations, sending shockwaves through the global market. Just a week ago, Chinese demand pushed gold prices to an all-time high of $3,500 per ounce, fueled by massive inflows into ETFs such as Huaan Yifu, Bosera, and Guotai. However, ahead of the Labor Day holiday, China reversed course, liquidating 1 million ounces across SHFE and SGE, wiping out the gains from April 22.
The timing of these trades has amplified their impact. Since China executes transactions during Asian morning hours, when liquidity is lower, these moves triggered automated trading signals outside China, accelerating the price drop. As a result, gold prices have now sunk to their lowest level in two weeks.
Despite the sell-off, China still holds a 40% share of total open interest, suggesting that while upward momentum may have peaked, the country remains a dominant force in the gold market. Analysts warn that further volatility could follow as traders react to China’s shifting strategies.
Will gold prices stabilize, or is this just the beginning of a larger correction? Investors are watching closely as the market adjusts to China’s latest move.