Q1 domestic gold ETF holdings increased by 114.88% year-over-year! Will gold and silver prices rise?

On May 9th, data released by the China Gold Association showed that in the first quarter of 2026, domestic gold ETF holdings increased by 50.438 tons, a 114.88% rise compared to the first quarter of 2025; by the end of March, domestic gold ETF holdings rose to 298.289 tons. Industry insiders believe this reflects domestic investors’ enthusiasm for gold allocation, as well as their long-term recognition of gold’s hedging and preservation properties.

Additionally, on May 8th, data released by the U.S. Department of Labor showed that non-farm employment in the U.S. increased by 115k in April, higher than Bloomberg’s forecast of 65k.

Shanshan, a precious metals analyst at Huishang Futures, told Futures Daily that the April non-farm employment number was the first consecutive increase in nearly a year, far exceeding market expectations. This indicates that despite facing headwinds such as high oil prices, inflation, and prolonged high interest rates, the U.S. labor market remains resilient.

Wang Wenhu, from the Guoyuan Futures Research Institute, believes that the much higher-than-expected increase in non-farm employment in April and the steady unemployment rate are achieved under the premise of declining labor force participation. Therefore, the April non-farm employment data temporarily reinforce the expectation that the Federal Reserve will not cut interest rates in 2026. However, if consumer inflation remains high in the future, the Fed’s monetary policy will continue to tilt “hawkish,” and slowing U.S. economic growth could negatively impact the employment market.

Regarding the impact on the precious metals market, Shanshan believes that the April non-farm employment data will lead the Federal Reserve to “stand pat” in May. Currently, U.S. consumer confidence has hit a new two-month low, with rising oil prices and tariffs intensifying inflation fears. Meanwhile, U.S. PMI and retail data remain steady, and March’s CPI was driven higher by gasoline prices, with core inflation pressures outside energy still present. This suggests that the Fed will find it difficult to change its high interest rate policy tone in the short term. Under the expectation of sustained high interest rates, precious metals prices may face significant correction pressures.

Beyond economic data, Shanshan further analyzed that Middle Eastern geopolitical conflicts remain one of the main factors influencing precious metals prices. Currently, there are new developments in U.S.-Iran negotiations, and market risk appetite has rebounded, but attention should still be paid to the progress of negotiations. If conflicts recur, major central banks outside China and the U.S. may enter a rate hike cycle in June, potentially leading to substantial tightening of global liquidity; if tensions ease and stagflation fears subside, the pace of global liquidity tightening could slow, which would be bullish for precious metals prices.

Overall, Wang Wenhu believes that in the short term, attention should be focused on the progress of U.S.-Iran negotiations, U.S. economic data, and the central banks’ gold reserve adjustments. Given the complex and volatile Middle Eastern situation, the persistent closure of the Strait of Hormuz, high energy prices potentially causing a rebound in consumer inflation, and the hawkish monetary policy expectations of major central banks—including the Fed—coupled with ongoing increases in gold reserves by various countries’ central banks, precious metals prices are likely to fluctuate strongly but not decline sharply.