Eyes Are on China to Help Keep Gold Prices Afloat

Thu Aug 28 2025

Gold’s demand drivers remained in the month of July, keeping prices afloat. However, for the rest of the year, gold’s ability to sustain its rally could hinge on demand from China.

According to data from the World Gold Council (WGC), the systemic risk of inflation was able to outweigh strength in the dollar, which led to a modest increase in gold prices for July. Wholesale demand for gold in China also contributed to the tepid rise, but the WGC noted that demand should amplify later in the year as the holiday season approaches. This helped to offset outflows in Chinese gold ETFs.

The central bank of China continued to purchase gold, extending its purchase streak to nine months. China added another 2 tonnes in gold during July to bring their total reserves to 2,300 tonnes. If that buying spree can continue through the rest of the year, that should help keep the bullish wind in gold’s sails.

Stats as of 31 July 2025.

2 Ways to Achieve Gold Exposure

If gold happens to dip, it can open opportunities for investors to capture exposure at cheaper prices. With gold over $3,000 per ounce, that may be out of reach for the majority of investors. However, gold funds and ETFs from Sprott can provide access. Two in particular to consider are the Sprott Physical Gold Trust (PHYS) and the Sprott Gold Miners ETF (SGDM).

First up, PHYS can provide easy access to pure-play gold exposure. Furthermore, it also adds a greater degree of flexibility by allowing investors to convert their fund shares into physical bullion. This should appeal to investors who want to experience a more tangible investment fee. On the other side of that investment spectrum, shares of PHYS allow investors to avoid the logistics of storing physical bullion.

Another option plays off the rise in spot gold prices via mining stocks. As gold demand rises, supportive services in the gold industry like mining and/or exploration tend to rise in tandem with the precious metal’s prices . Rather than create a portfolio of individual mining stocks, SGDM adds broad-based exposure without having to perform the perfunctory research to look for opportunities in the space. Furthermore, it eschews the overconcentration risk investing in shares of single companies.

Per its fund description, SGDM tracks the Solactive Gold Miners Custom Factors Index. This index tracks the performance of large-cap gold companies that trade on Canadian and U.S. exchanges for additional country diversification.

Source: https://www.etftrends.com