The latest Weekly Markets Monitor report published by the World Gold Council (WGC) provides hard numerical evidence for this. The data show that in the analyzed week, the Asian session accounted for as much as 62.59% of the total return on gold. By comparison, the U.S. session generated only 2.50% during the same period. This disparity shows where the actual source of liquidity and price dynamics currently lies.
While global ETF funds (mainly in the U.S. and Europe) were recording a slowdown in outflows, investors on the Shanghai Futures Exchange (SHFE) approached the market much more aggressively, clearly increasing their engagement in long positions (net longs) on futures contracts. We observe a gradual shift of the market’s center of gravity for precious metals to the East.
“In the current macroeconomic conditions, analyzing the gold market solely through the lens of U.S. Fed decisions or the behavior of New York-based ETF funds becomes anachronistic. The importance of Asian investors – both institutional and retail demand – is steadily growing. This could lead to a situation where local physical demand in the East has a much greater and more lasting impact on short‑term price behavior and dampening of potential corrections than the sentiment prevailing on Wall Street.” – Łukasz Wydra, Cashify Gold analyst.
