Why Gold Is Flowing From West To East

May 16, 2024, 4:08 p.m. IST

Yesterday silver hit a four-week high and gold continues to hold onto recent gains. Today’s labour market data isn’t sparking significant movement in the gold market. However, it is facing some technical selling pressure as it tests resistance levels slightly below $2,400 per ounce. Yesterday’s US CPI report presented a scenario that is bullish for precious metals investors. With CPI data coming in lower than expected policy doves will now be pushing for the FOMC to cut rates sooner, rather than later.

For gold and silver investors in the West, the uncertainty regarding the FOMC’s next moves is dampening prices somewhat, but they do remain in a solid uptrend. We continue to see a divergence between gold demand drivers between the East and West. In the West central bank decisions and economic data remain at the forefront of buyers’ minds, but in the East this is now a secondary factor. Instead central banks, institutions and consumer East of Germany are focused on gold accumulation, even buying into the price surge last month.

The release of the World Gold Council’s Q1 demand trends report has confirmed this. Data for the first quarter of this year showed the PBoC’s gold purchases continued for a 17th month in a row, whilst gold bar and coin demand was also driven by China.

So where does this leave the West? In today’s video Jan Skoyles wonders if it leaves them with ‘no plan B’. Do you agree? We’ve been chatting to a few clients recently and it has been interesting to hear thoughts on future gold market trends and what is driving people to increase their gold allocation. Let us know yours, either by replying to this email or in the comments below the video.

Why is China buying up so much gold and what does it mean for the gold price? We take a look in this week’s latest video.

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About Author

Dave Russell

David is the CEO of GoldCore. Until Summer 2023 he was the Director of Marketing and Communications, responsible for all marketing and communications strategies and branding. David joined GoldCore in 2008 as Director of Business Development and later took over as Director of Marketing and Communications in 2020. Prior to this Dave managed and operated his own Marketing Agency and completed multiple coaching qualifications. "Working for GoldCore gives you a fantastic lens through which to view global financial and geopolitical developments. I am very proud to be part of a company that contributes to increasing investors understanding of these developments." When he’s not at work, David is passionate about sailing and has completed the ‘Round Ireland Yacht Race’ twice.