Influence of Asian traders is increasing in precious metals market, especially in Shanghai
Sun April 28 2024
The
Shanghai Stock Exchange has witnessed significant and bullish bets in recent
times, indicating the increasing influence of Asian traders in the precious
metals market. Chinese speculators, in particular, have made substantial
investments in gold, contributing to the surge in its prices to record levels
this month. This trend suggests that Asian traders are exerting a greater
impact on the bullion market compared to their Western counterparts.
Gold long positions held by futures traders on the Shanghai Futures Exchange
have notably increased, reaching 295,233 contracts, equivalent to 295 tons of
gold. This represents a remarkable 50 percent rise since late September,
preceding the escalation of geopolitical tensions in the Middle East. According
to Bloomberg data, a record number of bullish positions totaling 324,857
contracts were recorded at the beginning of this month.
Moreover, on the Shanghai Commodity Futures Exchange, the trading company
"Chung Kai Futures" has amassed a substantial position in gold
futures contracts, holding slightly over 50 tons of the precious metal. This
accumulation is valued at approximately USD4 billion and constitutes more than
2 percent of the Chinese Central Bank's gold reserves. Such significant
holdings by Chinese traders underscore their growing influence in the global
gold market.
The surge in gold trading volumes on the Shanghai Commodity Futures Exchange
further highlights the fervor among Asian traders. Trading volumes have soared
to more than five times the average level seen in 2023, reaching 1.3 million
contracts at the peak of trading last week. Analysts attribute this trading
frenzy to the remarkable rise in gold prices, with the precious metal
surpassing USD2,400 per ounce earlier this month.
In summary, the burgeoning influence of Asian traders, particularly in
Shanghai, is reshaping the dynamics of the precious metals market. Their
substantial investments and active participation in gold trading activities
highlight the region's growing significance as a key player in the global
bullion market.
Source: https://menafn.com/