GOLD and SILVER extended their rallies from last weekend's price crash on Wednesday, rising back above $5000 and $90 per ounce in London after bullion prices in the precious metals' No.1 consumer nation China showed a rebound in demand over supply.

But after touching $5091 per Troy ounce − down 9.0% from last Thursday's record gold price peak but a new all-time high only 3 days before that − the price of gold then erased all of today's gains, dropping back to $4940 in the London bullion market.

Silver meantime peaked above $92 per ounce − cutting its 41.0% plunge since Thursday to 24.2% − before also reversing today's rally to trade down to $87.

"Many institutions believe that last week's pullback has not shaken the medium- to long-term support for gold," says a report on China's gold ETF trust fund inflows and outflows from the Securities Times.

"Supported by factors such as the Dollar's falling credibility, global central bank gold purchases, and geopolitical factors, gold's investment value remains promising."

Wednesday afternoon's benchmarking auctions on the Shanghai Gold Exchange saw gold fix at the equivalent of $43 per ounce above London quotes, while silver showed a premium of more than $13, also offering a strong incentive to new bullion imports.

Thursday-to-Monday's 19.0% plunge in China's benchmark gold price coincided with a 3.1% drop in Shanghai's main CSI300 stock index.

The CSI has since recovered 2/3rds of that loss, while the Shanghai gold price in Yuan has rebounded by 12.5% to fix at ¥1138 per gram.

After seeing the equivalent of over $7 billion of inflows in January, China's gold-backed ETFs saw record outflows worth nearly $1bn on Tuesday's bounce in prices.

Gold accumulation sites and apps in China have meantime been overwhelmed by traffic according to social media reports, with would-be buyers and sellers unable to log in and deal.

"I was just following the trend and playing around," says a real-estate agent on social media, quoted by a report on China Times.

"A friend at the bank told me that the gold market had been doing well in recent months and that investments could yield a 20% return.

"I didn't expect to get stuck with it as soon as I bought in."

Taking profit, in contrast, Zhongcai Futures − a proprietary trading house owned by Chinese entrepreneur Bian Ximing − banked over $500m from silver's price crash, according to the Financial Times, after betting against last week's price surge on the Shanghai Futures Exchange.

Ximing first made headlines in Western financial media betting on spring 2023's gold price surge, a move repeated as Chinese gold demand again drove prices higher the following year before Zhongcai switched into bullish derivatives bets on copper in 2025.

With the SHFE raising margin requirements for both hedging and speculative traders in silver on Tuesday, the Shanghai Gold Exchange yesterday adjusted both its margin requirements and its daily price-move limits for gold and silver.

After plunging by 16.7% from last Thursday's record-high close in Shanghai, China's largest gold ETF, the HuaAn Gold Fund (SSE:518880), today extended its rebound to 9.7% from Monday's 2-week low.