Gold Tumbles On Near-Record Chinese Liquidations

Just one week ago, China seemingly couldn’t get enough of gold, and the price of spot briefly touched a record $3500 as a result of, among other things, staggering inflows into Chinese gold ETFs such as the Huaan Yifu, Bosera and Guotai gold ETFs.

But, as with all things momentum-based in China, it’s easy come, easy go in the land of Dragons, and as Goldman commodity trader Adam Gillard writes, China liquidated what it bought last week ahead of the Labor Day holiday, resulting in total onshore positioning now 5% off the ATH. And while China’s share of total open interest remains on the highs at ~40%, upward momentum may have peaked for the time being.

Here is the story of Chinese gold buying… and then selling, in five charts.

Last Tuesday (22nd April) gold made an ATH as China added 1.2mn oz of positioning across SGE and SHFE, on record volume….

… so fast forward to today, when China liquidated a near-record 1mn oz across SHFE and SGE, reversing the entire April 22 blow-off top.

… although the ETF was largely unchanged

… Resulting in total Chinese positioning now ~5% off the ATH .

And the paper (spec) import arbitrage ~$20/oz off the highs

According to Gillard, who confirms our recent observation that all recent price moves take place exclusively around the time China opens…

China opens and gold soars to new record high https://t.co/z61bLLj4Y9 pic.twitter.com/bwLH49On8X

— zerohedge (@zerohedge) April 16, 2025

… China is having a disproportionate impact on price because they execute during an illiquid part of the day (Asia morning) which likely triggers ex China CTA trading signals. Sure enough, gold is dumping in early Asian trading to the lowest level in 2 weeks.

More int the full Goldman note available to pro subs.