Gold Holds Firm Above $4,000 as China's Gold Rush Continues
Gold prices have defied expectations and held steady above $4,000 despite a challenging rate environment. This resilience is largely due to a structural premium embedded in gold, driven by geopolitical risk hedging and reserve diversification. According to MKS PAMP, this premium now stands at roughly $840 an ounce, up from just $120 before 2022.
China has been a major contributor to this trend, importing 1,077 tons of gold between January and August 2026 alone. This is already surpassing the country's total intake for all of 2025 after just eight months, with strong private investment demand and a firm yuan driving the surge.
Central banks and state-linked buyers have effectively put a floor under the market, absorbing the blows from rate hikes. The People's Bank of China added another 20.2 tons to its reserves in August, while the Bank of Korea plans to resume purchasing gold from domestic producers starting in December.