The recent surge in the global gold market, marked by record highs, has been influenced by China’s significant role in the industry. However, with the Chinese gold market closed for the May Day holidays, gold prices plummeted by $100 per ounce, causing concerns about the country’s impact on the global market. The London-based gold market, still the world’s central hub for gold trading and storage, saw prices drop by $50 overnight and again in morning trade, reaching a low of $3203 per Troy ounce. This significant decline has raised questions about the accuracy of AI-generated click-bait analysis that has been circulating about China’s gold investing and trading trends. According to Reuters, 29 analysts and traders polled for their latest end-2025 gold price forecasts have increased their predictions by an average of 11% compared to three months ago, with a predicted price of $3065 per Troy ounce. One respondent noted, “Gold’s fortune will continue to depend on other markets’ misfortune.”
Despite the decline in gold prices, the market has seen a few instances of resilience. On Thursday, gold bullion hit 2-week lows in Dollar and Euro terms at €2830 and £2404, but then rallied almost 1.0% as New York’s stock markets opened sharply higher following strong quarterly earnings from tech giants Microsoft and Meta. The market’s fluctuations have also been influenced by other commodities, such as crude oil and silver. Crude oil had sunk to new 4-year lows beneath $60 per barrel of Brent, while silver hit 3-week lows 30 cents beneath $32 per ounce before rallying close to $32.50. Industrial metal copper, however, held steady, despite a 4.3% plunge the previous day. Analysts have expressed concerns about the physical market’s wavering and the impact of central bank flows on gold prices. Suki Cooper, an analyst at Standard Chartered, noted, “Price risks persist [in gold] given the physical market is wavering and central bank flows – while positive – are slowing.” Rhona O’Connell, an analyst at StoneX, agreed, saying, “Physical demand has tailed off,” but also noted that “volatility is more of an enemy to demand than absolute levels.”
In contrast to jewelry demand, Indian gold coin and small-bar demand has shown a different trend. According to the World Gold Council’s Gold Demand Trends report, Indian gold jewelry demand plunged more than 1/4 by weight year-on-year in January to March, but gold coin and small-bar demand rose 7.1% from Q1 2024 to stand 25.0% above the past 5 years’ first-quarter average. This shift in demand has led to a significant increase in retail gold investment products, which now account for close to 2/5ths of India’s total household demand for gold, the highest proportion since the global gold price crash of Q2 2013.
Global Gold Market Trends
• Gold prices have reached record highs, with the London-based gold market being a key driver of this trend. • The Chinese gold market has been a significant influence on the global market, with prices plummeting by $100 per ounce during the May Day holidays. • 29 analysts and traders have increased their predictions for the end-2025 gold price forecast, with a predicted price of $3065 per Troy ounce. • Crude oil and silver prices have also been affected by the global market, with crude oil reaching new 4-year lows beneath $60 per barrel of Brent. • Industrial metal copper has been less affected, holding steady despite a 4.3% plunge the previous day.
Analyst Insights
• Suki Cooper, an analyst at Standard Chartered, notes that “price risks persist [in gold] given the physical market is wavering and central bank flows – while positive – are slowing.”
• Rhona O’Connell, an analyst at StoneX, agrees that “physical demand has tailed off,” but also notes that “volatility is more of an enemy to demand than absolute levels.”
• The shift in demand from jewelry to gold coins and bars has led to a significant increase in retail gold investment products, accounting for close to 2/5ths of India’s total household demand for gold.
Indian Gold Market Trends
• Indian gold jewelry demand has plummeted more than 1/4 by weight year-on-year in January to March. • Gold coin and small-bar demand, however, has risen 7.1% from Q1 2024, standing 25.0% above the past 5 years’ first-quarter average. • Retail gold investment products have seen a significant increase, accounting for close to 2/5ths of India’s total household demand for gold. • The Indian gold market has shown a similar shift to China, with households investing in gold coins and bars rather than jewelry.
Market Fluctuations
| Commodity | Price Movement |
|---|---|
| Crude Oil | New 4-year lows beneath $60 per barrel of Brent |
| Silver | Hit 3-week lows 30 cents beneath $32 per ounce before rallying close to $32.50 |
| Industrial Metal Copper | 4.3% plunge the previous day, but holding steady |
Expert Opinions
“Gold’s fortune will continue to depend on other markets’ misfortune,” says one respondent. This sentiment reflects the complex and dynamic nature of the global gold market, where prices are influenced by a wide range of factors. “The physical market is wavering, and central bank flows – while positive – are slowing,” notes Suki Cooper. This warning highlights the challenges facing the gold market, including the physical market’s instability and the impact of central bank flows on prices. “Volatility is more of an enemy to demand than absolute levels,” agrees Rhona O’Connell. This perspective underscores the importance of understanding the role of volatility in shaping demand for gold.
India’s Gold Market
India’s gold market has been experiencing significant changes, with a shift in demand from jewelry to gold coins and bars. According to the World Gold Council’s Gold Demand Trends report, Indian gold jewelry demand has plummeted more than 1/4 by weight year-on-year in January to March, while gold coin and small-bar demand has risen 7.1% from Q1 2024. This shift in demand has led to a significant increase in retail gold investment products, accounting for close to 2/5ths of India’s total household demand for gold. The Indian gold market has shown a similar shift to China, with households investing in gold coins and bars rather than jewelry.
Conclusion
The global gold market has been influenced by a range of factors, including the Chinese gold market, crude oil, and silver. The recent surge in gold prices has been driven by the London-based gold market, and the Chinese gold market has played a significant role in shaping this trend. As the gold market continues to evolve, it is essential to understand the complex dynamics at play. The physical market’s instability, the impact of central bank flows, and the role of volatility in shaping demand for gold are all key factors to consider. By analyzing the trends and insights from experts, we can gain a deeper understanding of the global gold market and its future prospects. The shift in demand from jewelry to gold coins and bars in India and China highlights the importance of retail gold investment products and the potential for growth in this sector. As the gold market continues to evolve, it is essential to stay informed and adapt to changing market conditions.
