Gold Demand Surges in China Amid Trade War Tensions

Gold demand in China surged this week as investors turned to safe-haven assets amid growing concerns over the global trade war. The spike followed new tariff plans announced by U.S. President Donald Trump, prompting a shift in market sentiment and driving buyers toward gold for protection against economic uncertainty.

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In China, the world’s largest consumer of gold, traders applied premiums ranging from $6 to $13 per ounce above global spot prices. This marks a significant shift from last week, when prices reflected a $4 discount or a minimal $1 premium.

The shift in premiums reflects heightened market uncertainty, attracting new investors while others seized the opportunity to capitalize on high prices. There was also notable activity in newly minted bullion, suggesting strong speculative interest within the market.

Trump’s tariff policy, which includes a minimum 10% levy on most U.S. imports and significantly higher rates on goods from dozens of countries, has fueled global anxiety. As a result, central banks are expected to continue boosting their gold reserves throughout the year to hedge against policy-related risks.

In contrast, Indian buyers remained cautious. Local traders offered discounts of up to $20 per ounce below official domestic prices, which include a 6% import duty and a 3% sales tax. This is a slight improvement from the previous week, when discounts reached $33. The persistent price volatility has kept many Indian consumers on the sidelines, waiting for greater stability.

Meanwhile in Japan, gold premiums remained steady at $0.50 per ounce. Although some profit-taking occurred, buying interest returned once prices dipped.

Overall, these trends highlight gold's enduring appeal as a safe-haven asset during periods of global economic tension and unpredictable trade dynamics.