Oro y plata de Shanghai, buen comienzo del año del caballo. Varias joyerías anuncian que aumentarán sus precios próximamente

21st Century Business Herald Reporter Ye Maishui

During the Spring Festival holiday, gold and silver once again showed a rollercoaster market.

Specifically, spot gold prices fell for two consecutive days on February 16 and 17, then, due to ongoing uncertainty in U.S. trade policies and tense Iran situation, investors shifted to safer assets, leading to five consecutive days of rise from February 18 to 23.

Silver experienced more intense fluctuations during the holiday, rising nearly 17% in total. Within six trading days, four days saw fluctuations exceeding 4%, with an 8.19% surge on February 20, and a volatility of over 9%. As of 17:30 Beijing time on February 24, gold once reached $5,237 per ounce, while silver hit a high of $88.9 per ounce. Due to the sharp rise in silver during the holiday, Guotou Silver LOF hit the daily limit on the 24th.

Multiple gold shops announce upcoming price increases

Spring Festival is a peak season for precious metal consumption. A staff member at a gold shop in Beijing Road commercial area, Guangzhou, said that although gold prices fluctuated slightly during the holiday, citizens’ enthusiasm for buying gold remained high, with some consumers spending nearly 80,000 yuan in a single purchase mainly for daily wear. In the Tianhe commercial area, where trendsetters gather, lightweight, creatively designed “light gold” products are more popular. Many “Post-95s” have become new main consumers.

Besides wearing, consumers also like to give gold jewelry as New Year gifts, with small gold bars around 10 grams being the most popular.

“Buying for my son as a keepsake, 10 grams each year, will be a considerable wealth by adulthood,” said Mr. Tan, a Guangzhou resident. He told reporters he prefers to choose investment gold bars with better cost performance rather than high-value-added jewelry.

After the holiday, on the 24th, Shanghai Gold and Shanghai Silver also saw a rebound, with Shanghai Gold rising by 3.5% consecutively, and Shanghai Silver surging by 12.7%.

Tang Linmin, senior researcher at China International Futures, told reporters that the post-holiday rise in Shanghai Gold was mainly driven by three factors:

First, the impact of Trump’s tariffs “re-emerges.” During the Spring Festival, Trump’s large-scale global tariff policies were deemed illegal, triggering a series of responses from the Trump administration, including the announcement of a 10% temporary import tariff on goods imported from around the world, later raising the rate to 15%. Furthermore, according to CCTV news, U.S. media reported that the Trump government is planning broader “national security tariffs,” covering industries such as large batteries, pig iron and iron fittings, plastic pipes, industrial chemicals, and power grid and telecom equipment. These measures immediately added great uncertainty to global trade, sparking strong risk-averse sentiment in the markets.

Second, tensions in Iran have escalated again. During the Spring Festival, optimistic news about U.S.-Iran negotiations was quickly overshadowed by reports that U.S. military forces were prepared to strike Iran.

Third, internal divisions within the Federal Reserve also favor gold. The Fed’s January meeting minutes released during the holiday showed ongoing disagreements within the Fed, and recent statements by Fed officials continue to show a hawk-dove mix. This reduces the likelihood of a rate cut at the March meeting, but the uncertainty about long-term policy outlooks still benefits gold.

Qu Rui, senior vice president of Dongfang Jincheng Research and Development Department, said that international gold prices surged, breaking through $5,200 per ounce to reach a three-week high, mainly driven by renewed U.S. tariff tensions, increased trade policy uncertainty, and geopolitical risks involving Iran, which collectively fueled a sharp rise in gold prices. Although U.S.-Iran negotiations are scheduled for the 26th of this month, reports that Trump’s administration is considering initial military strikes on Iran have heightened market risk aversion, further boosting gold prices. Additionally, the overall increase in international gold prices during the spring holiday period also contributed to domestic gold price rises after the market opened on the 24th.

Recently, the World Gold Council released its 2025 “Global Gold Demand Trends Report,” showing that the total global gold demand (including OTC transactions) will surpass 5,000 tons for the first time, reaching 5,002 tons, a new record high. Coupled with the strong trend of gold prices repeatedly hitting new records this year, the total value of global gold demand soared to $555 billion, a 45% increase year-on-year. Throughout the year, the main drivers of high investment interest in gold are risk aversion and asset diversification needs.

Specifically, global gold investment demand increased to 2,175 tons, becoming the main driver of the record-breaking total demand in 2025. Globally, investors seeking risk hedging and diversification flooded into gold ETFs (Exchange-Traded Funds), with holdings increasing by 801 tons over the year, the second-highest annual increase in history. Meanwhile, physical gold investment demand remained strong, with global demand for gold bars and coins reaching 1,374 tons, valued at $1.54 billion, hitting a 12-year high. In 2025, central banks worldwide purchased 863 tons of gold, maintaining a high scale of gold purchases, though the pace has slowed compared to the past three years.

Following the rise in gold prices, gold shops also raised prices.

Lao Pu Gold Taobao flagship store recently announced a price adjustment, scheduled for February 28, 2026. The details of the price change will be based on actual online and offline prices.

Lao Pu Gold had three price increases in 2025, with the first adjustment also after the Spring Festival last year, with increases ranging from 5% to 12%.

Chow Tai Fook also announced that it will adjust gold product prices after the Spring Festival, possibly starting in mid-March. Some stores have already received notices, with price increases mainly on fixed-price products, estimated at 15%-30%. Exact details and implementation times will depend on in-store price tag adjustments.

Malaysian Central Bank reactivates gold purchase operations after more than seven years

Although gold and silver experienced significant fluctuations early this year, with gold’s increase from nearly 30% to around 20%, and silver from 64% down to 23%, many market participants still believe that the upward logic of precious metals lies in ongoing global geopolitical frictions and the Federal Reserve’s easing cycle. As long as this logic remains intact, adjustments in gold and silver will be merely fluctuations, with the overall trend moving upward.

UBS reaffirmed a positive outlook on gold, expecting the target price of international spot gold to reach $6,200 per ounce in the coming months. Its analysts believe that geopolitical risks involving Iran and the U.S. will remain high, and the Fed’s easing cycle is expected to continue, putting pressure on real interest rates. UBS expects that with stronger investment flows and continued central bank purchases, gold prices will further rise. On the supply side, growth appears limited. Although high gold prices may incentivize exploration, consulting firm Wood Mackenzie estimates that by 2028, about 80 mines will exhaust current production plans, indicating limited short-term supply elasticity.

The February global fund manager survey by Bank of America shows that buying gold has become the most crowded trade for the second consecutive month. Among the surveyed fund managers, 50% said “long gold” was the most crowded trade in February, down from 51% in January. Meanwhile, 20% of fund managers said that buying major U.S. tech stocks—Nvidia, Alphabet, Apple, Amazon, Microsoft, Meta, and Tesla—was the most crowded trade.

However, some investment banks believe that gold’s rise has already become irrational.

Citi pointed out that current gold prices have severely overextended future uncertainties, and its significant downward revision of long-term gold price expectations warns that in a bear market scenario, gold could fall to $3,000 per ounce. Maximilian Layton, head of commodities at Citi, said that although short-term gold prices may still spike, their valuation has reached “extreme levels.” He predicts that as risk aversion may subside in the second half of 2026, the “pillars” supporting gold prices could face structural collapse.

Citi also noted that the bubble-like features of current gold prices are first reflected in their detachment from the real economy. Currently, global annual expenditure on gold as a percentage of GDP has risen to 0.7%, the highest in 55 years, far exceeding the level during the “golden bull market” in 1980 amid the oil crisis.

Furthermore, current gold prices have completely detached from the marginal production costs of mining. Reports show that profit margins for high-cost gold miners are at their highest in 50 years. This indicates that the surge in gold prices is not driven by “difficult mining” or “rising costs.”

The latest data from the International Monetary Fund (IMF), released on February 17, shows that Bank Negara Malaysia (Malaysia’s central bank) increased its gold holdings by 3 tons in January 2026, raising its official gold reserves to 42 tons. This is the first expansion of gold holdings since October 2018, marking the reactivation of gold purchase operations after more than seven years.

The world’s largest hedge fund, Bridgewater Associates, disclosed its latest U.S. stock holdings (13F). The filing shows that as of December 31 last year, Bridgewater’s total U.S. stock holdings reached $27.4 billion, up from $25.5 billion in Q3. During the period, Bridgewater continued its AI-themed allocations, increasing holdings in Nvidia, Amazon, and Micron Technology. Meanwhile, amid the ongoing strength of gold prices, Bridgewater also increased its holdings in Newmont Corporation, one of the world’s largest gold producers. Overall, in Q4, Bridgewater added 191 new holdings, increased 450 positions, and reduced 395, with 165 positions completely liquidated. The top ten holdings accounted for 36.33% of total assets.

(Edited by: Wen Jing)

Keywords: Gold Silver