Gold Tops $4400 as China's Investment Demand Keeps Growing

GOLD PRICES eased back on Tuesday in London after topping $4400 per ounce for the first time in more than 2 months during strong trading in China overnight.

Silver prices also jumped again before easing back, touching the highest in 7 weeks above $66 per troy ounce as global stock markets rose to beat last week-end's fresh all-time record on the MSCI World Index.

Fellow industrial precious metals platinum and palladium also rose but peaked below last week's near 2-month highs.

"Significant fluctuations in gold prices at high levels, coupled with the implementation of new gold tax policies, have led to a continued divergence in domestic gold consumption patterns," says the China Gold Association, reporting a 1.2% year-on-year increase in total gold demand across the first 6 months of 2026.

Within that total − and extending the switch to gold investment away from adornment − gold jewelry demand sank 33.9% by weight from the first half of 2025. Investment gold bars and coins grew 28.4%.

Gold bullion in China today set the highest Shanghai benchmark price since 5 June, extending last week's 5.4% jump by 3.1% at ¥961 per gram.

But that gain lagged the move in prices for London settlement, reversing Monday's $11 per ounce premium to an $8 discount and suggesting softer demand versus supply in gold's No.1 mining, importing and consumer nation.

"Strong investment demand for gold has made gold bars and coins popular products," says the CGA of China's private-sector buying, "while a temporary correction in gold prices has boosted gold bar sales through bank channels.

"High gold prices have increased the cost of gold for industrial enterprises, resulting in a decrease in industrial gold consumption."

Outside the bullion markets today, crude oil rose to the highest in more than 2 weeks, topping $88 per barrel of Brent as both the USA and Iran issued new conditions for continuing talks to re-open the Strait of Hormuz to tanker traffic.

The US Dollar steadied above 7-week lows but Western government bond prices rose further, reducing the cost of longer-term borrowing following Friday's shock news of a drop in US employment in July.

Wednesday will bring US consumer price inflation data for last month.