GOLD NEWS

Influence of Asian traders is increasing in precious metals market, especially in Shanghai

Sun April 28 2024

The Shanghai Stock Exchange has witnessed significant and bullish bets in recent times, indicating the increasing influence of Asian traders in the precious metals market. Chinese speculators, in particular, have made substantial investments in gold, contributing to the surge in its prices to record levels this month. This trend suggests that Asian traders are exerting a greater impact on the bullion market compared to their Western counterparts.

Gold long positions held by futures traders on the Shanghai Futures Exchange have notably increased, reaching 295,233 contracts, equivalent to 295 tons of gold. This represents a remarkable 50 percent rise since late September, preceding the escalation of geopolitical tensions in the Middle East. According to Bloomberg data, a record number of bullish positions totaling 324,857 contracts were recorded at the beginning of this month.

Moreover, on the Shanghai Commodity Futures Exchange, the trading company "Chung Kai Futures" has amassed a substantial position in gold futures contracts, holding slightly over 50 tons of the precious metal. This accumulation is valued at approximately USD4 billion and constitutes more than 2 percent of the Chinese Central Bank's gold reserves. Such significant holdings by Chinese traders underscore their growing influence in the global gold market.

The surge in gold trading volumes on the Shanghai Commodity Futures Exchange further highlights the fervor among Asian traders. Trading volumes have soared to more than five times the average level seen in 2023, reaching 1.3 million contracts at the peak of trading last week. Analysts attribute this trading frenzy to the remarkable rise in gold prices, with the precious metal surpassing USD2,400 per ounce earlier this month.

In summary, the burgeoning influence of Asian traders, particularly in Shanghai, is reshaping the dynamics of the precious metals market. Their substantial investments and active participation in gold trading activities highlight the region's growing significance as a key player in the global bullion market.

Source: https://menafn.com/