The price of gold on world markets has shown steady growth, reaching $4,213 per troy ounce. This price level is the highest in the last six weeks, having updated the peaks of the end of June. According to Bloomberg, quotations of the precious metal increased by 2.8% amid steady demand from Asian investors. The key driver of the current rally is China, where there is a continuous influx of capital into specialized exchange-traded funds. The positive dynamics of funds inflows into Chinese gold ETFs has been maintained for 14 consecutive trading days.

Representatives of the World Gold Council point out an important structural feature of the market. Despite the global outflows in June, the cumulative performance of Chinese funds for the first half of the year remains impressive. Since the beginning of the year, the inflow of investments into Chinese gold ETFs has amounted to 40 billion yuan, which is equivalent to $5.6 billion. This result was the second highest indicator for the first half of the year in the entire history of observations. Analysts emphasize a noticeable increase in the activity of institutional investors who are building up positions in defensive assets. The participation of large funds and banks in Chinese ETFs significantly supports the overall market demand for physical metals and derivatives.

Large-scale purchases by government regulators provide fundamental support for prices. The People's Bank of China is consistently increasing its own gold reserves. In the 20 months to June, the Chinese central bank purchased 82 tons of the precious metal. Such actions by the monetary authorities have a positive effect on the mood of market participants and confirm the strategic importance of gold for the national economy.

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The material has been prepared solely for informational purposes and does not constitute financial advice or recommendation.