Who’s Buying and Who’s Selling in the Gold Market Now

How Has the Gold Market Landscape Shifted in Recent Years?

The global gold market has undergone a profound transformation in recent years, with power decisively shifting from traditional Western trading hubs to Eastern markets. This structural realignment reflects broader geopolitical and economic changes that are fundamentally altering who's buying and who's selling in the gold market now, as well as how gold is traded, valued, and priced worldwide.

The Rise of Shanghai as a Gold Trading Hub

The Shanghai Gold Exchange (SGE) has emerged as the dominant force in precious metals trading, capturing approximately 40% of global open interest in gold trading according to 2025 market data. This represents a fundamental power shift eastward that few Western financial commentators fully acknowledge.

"Shanghai offers substantially lower commissions, greater liquidity, and trading hours that perfectly align with the Asian business day," notes precious metals analyst Vince Lanci on the Daily Gold Podcast. "This isn't just a temporary shift—it's a structural realignment of where price discovery happens."

The SGE's growing influence has coincided with several key developments:

• Trading volumes on the SGE consistently exceed those of traditional Western exchanges
• Commission rates in Shanghai are approximately 35% lower than COMEX equivalents
• Chinese trading hours (8am-11pm local time) now capture the majority of global price movements
• International institutional traders increasingly execute their largest positions during Shanghai hours

This eastward shift is particularly significant as it coincides with China becoming the world's largest gold producer, consumer, and importer—creating a self-reinforcing cycle of market dominance.

Western Markets Facing Structural Challenges

Traditional gold trading venues like COMEX and the London Bullion Market Association (LBMA) have experienced unprecedented difficulties maintaining their historical market positions. According to CME Group data, COMEX open interest has declined to levels not seen since early 2022, suggesting a marked erosion of the exchange's market influence.

"COMEX is increasingly resembling a ghost town compared to its former trading volumes," Lanci observes. "What we're witnessing isn't cyclical—it's structural."

The challenges facing Western gold markets include:

• Delivery delays in London markets extending from the standard T+2 settlement to as much as 92 days in extreme cases
• Regulatory interventions that have disrupted normal market operations, particularly following liquidity events in 2023-2024
• Western bullion banks struggling to meet physical delivery obligations during periods of high demand
• Growing skepticism about the relationship between paper gold contracts and available physical metal

These structural issues have significantly damaged confidence in Western gold trading infrastructure, accelerating the migration to Asian markets where physical delivery mechanisms appear more robust.

Who Are the Key Buyers in Today's Gold Market?

The composition of gold buyers has evolved dramatically in recent years, with several key players emerging as dominant forces driving global demand. Understanding who's buying and who's selling in the gold market now provides crucial insight into potential price directions.

Central Bank Purchasing Patterns

Central banks globally have established themselves as the foundation of physical gold demand, with many institutions systematically increasing their gold reserves as a percentage of total holdings.

"Most central banks currently maintain approximately 15% of their reserves in gold, but historical precedent suggests this could double to 30% or higher," explains Lanci. "This represents an enormous structural bid underneath the market."

The World Gold Council reports that central bank gold purchases reached a record 1,136 tonnes in 2024, marking the third consecutive year of extraordinary buying. Key patterns include:

• Chinese central bank buying has been particularly aggressive during price dips, creating effective price floors
• Eastern central banks (Russia, Turkey, India) account for approximately 70% of total central bank acquisitions
• Western central banks have shifted from net sellers to neutral/slight buyers for the first time in decades
• These institutions typically execute purchases through discreet channels to minimize market impact

This systematic buying creates significant technical support during corrections, as these institutions view price weakness as opportunities to accumulate at more favorable levels. In fact, recent gold safe haven insights suggest central banks are increasingly viewing gold as essential to their reserve strategy rather than optional.

Chinese Institutional Investors

Beyond central bank activity, Chinese institutional investors have emerged as a major force reshaping the gold market landscape.

"Chinese insurance companies operate under regulatory mandates requiring gold allocation in their portfolios," notes Lanci. "These aren't discretionary buyers—they're required participants regardless of market conditions."

This institutionalized demand manifests in several ways:

• Chinese insurers typically purchase gold in a tiered approach, stepping in at predetermined price levels
• Corporate treasury departments increasingly allocate a portion of reserves to gold as a dollar alternative
• Chinese ETF investors represent a growing retail demand component, with holdings up 35% year-over-year
• The combined effect creates multiple layers of support during price corrections, particularly below $3,200

This multi-layered Chinese demand has fundamentally altered market dynamics, creating stronger support levels than in previous gold bull markets and contributing to the recent gold market surge that has surprised many Western analysts.

Macro Hedge Fund Positioning

Discretionary macro hedge funds have shown distinct patterns of engagement with gold that provide important signals about market sentiment:

• Throughout 2024, hedge funds were consistent buyers during rallies, amplifying upward price movements
• After January 2025, many funds shifted to selling positions even during price strength, suggesting profit-taking
• Recent market behavior indicates some funds may be reassessing their gold market participation as inflation dynamics evolve
• Trading volumes have decreased from previous peaks of 10,000-20,000 new contracts to around 5,000

"The hedge fund rotation we're seeing now mirrors similar patterns from previous bull markets," explains Lanci. "What's different this time is they're selling into a market with much stronger physical demand underneath."

Gold Producers' Hedging Activities

With gold prices at multi-year highs and production costs relatively contained, gold mining companies have unprecedented opportunities for strategic hedging:

• Current market conditions allow producers to lock in forward sales at $3,600-$3,700, levels not seen in decades
• High interest rates create advantageous carry trades for mining companies, enhancing the economics of hedging
• Energy costs remain relatively low compared to gold prices, enhancing profit margins significantly
• These factors create what analysts describe as a "once-in-40-year opportunity" for miners to secure future cash flows

"The producers who survive long-term are those who hedge intelligently during price strength," notes Lanci. "We're now seeing selective hedging programs being implemented, particularly among mid-tier producers with development projects needing financing."

What Technical Patterns Are Emerging in Gold?

Gold's price action reveals distinctive technical patterns that provide crucial insights into potential future movements. These patterns help explain the underlying market psychology driving both buyers and sellers.

Post-Breakout Consolidation Phase

Gold is currently navigating a consolidation phase following its powerful move above $3,000, a pattern consistent with previous bull market phases. The record gold highs analysis indicates this consolidation is actually healthier than continuous upward movement.

"Historical precedent suggests corrections typically test the 200-day moving average," explains Lanci. "What's particularly notable in this cycle is that consolidation is occurring at much higher levels than previous patterns would predict."

Key technical observations include:

• The 150-day moving average (currently around $3,100) has provided reliable support during recent pullbacks
• Previous consolidation phases lasted 3-5 months before resuming upward momentum
• The current bull market has produced higher lows during corrections than previous cycles
• This high-level consolidation is considered constructive for future price appreciation, establishing new support zones

Analysts note that gold's ability to maintain prices above $3,300 for extended periods represents a significant psychological shift in market perception of fair value.

Moving Average Convergence

As gold consolidates, key moving averages are rising to meet the current price, creating a technical foundation for the next potential move.

"The 150-day moving average could reach $3,100 by August based on current trajectories," notes Lanci. "This convergence often precedes the next significant directional move as the 'elastic band' of price deviation from longer-term averages normalizes."

Technical analysts highlight several important dynamics:

• A consolidation between $3,300-$3,500 would establish a strong foundation for future advances
• Chinese buying interest appears to be supporting prices at higher levels than in previous cycles
• The compression of volatility during consolidation phases often precedes expansion in the dominant trend
• Major technical resistance levels become less relevant as institutional allocation decisions drive prices

This pattern of consolidation followed by moving average convergence has characterized previous legs higher in gold bull markets, suggesting the current phase may be preparing for another advance.

How Is Silver Positioning Within the Precious Metals Complex?

Silver has emerged as a potential leader in the precious metals complex, showing increasingly bullish technical patterns and market behavior that may signal a leadership role in the next phase of the bull market.

Critical Price Levels for Silver

Silver is approaching key technical and psychological price thresholds that could dramatically alter market dynamics if breached.

"The $35 level represents significant multi-decade resistance for silver," explains Lanci. "A quarterly close above this level would be only the second-highest in history, with relatively minimal resistance between $37 and the all-time high near $50."

Key technical observations about silver include:

• The zone between $37-$50 contains minimal historical resistance due to limited trading history at these levels
• Silver has been establishing higher support levels after breaking through previous resistance at $28-$29
• The gold-to-silver ratio analysis shows compression from 90:1 to approximately 68:1, suggesting potential for further outperformance
• Previous bull markets saw ratios compress to 30:1 or lower during peak sentiment phases

Technical analysts note that silver's ability to hold above $30 after initial breakouts represents significantly stronger market structure than previous attempts to breach these levels.

Silver Mining Stocks Leading the Metal

A notable development has been the outperformance of silver mining stocks relative to the metal itself, often a leading indicator of major moves in the underlying commodity.

"Silver miners have displayed remarkable relative strength even during metal price corrections," notes Lanci. "This is particularly evident in junior producers and developers, which typically lead at major turning points."

Key observations regarding silver mining equities include:

• The SILJ ETF (representing junior silver miners) has outperformed spot silver by approximately 20% year-to-date
• Mining stocks are maintaining gains even during metal price corrections, suggesting strong underlying buying interest
• New capital appears to be flowing into the sector ahead of a potential breakout above $35
• This leadership by mining equities often precedes major moves in the underlying metal by 3-6 months

This pattern of mining stock outperformance is particularly significant as it attracts generalist investors who may not participate directly in metal markets.

Institutional Interest in Silver

While gold has traditionally attracted more institutional attention, silver is gaining increased interest from major financial players.

"Bank of America recently projected silver reaching $40 before gold hits $4,000," notes Lanci. "This represents a significant shift in institutional thinking about silver's potential relative to gold."

Evidence of growing institutional interest includes:

• Major financial institutions have issued increasingly bullish silver forecasts in recent months
• ETF inflows to silver vehicles have accelerated, with the SLV ETF adding over 15 million ounces in May 2025
• Macro funds that reduced gold positions have maintained or increased silver exposure
• A quarterly close above $35 could trigger significant institutional buying as models recalibrate to a new range

This institutional interest represents a potential sea change for silver, which has historically been driven more by retail than institutional investors.

What Are the Long-Term Implications for Precious Metals?

The current market dynamics suggest several important long-term trends for precious metals investors to consider when developing best investment strategies.

De-Dollarization Trends Supporting Gold

The gradual shift away from dollar dominance in global trade creates structural support for gold demand as an alternative reserve asset.

"Approximately 25% of global trade now occurs in non-dollar currencies according to IMF data," explains Lanci. "This represents a significant structural change that requires central banks to diversify their reserve holdings accordingly."

Key developments in de-dollarization include:

• Oil transactions in yuan have reportedly reached around 15% of the market according to 2024 Reuters estimates
• BRICS nations have increased non-dollar settlement by approximately 35% year-over-year
• Central banks need to adjust reserve compositions to match changing trade settlement patterns
• Gold serves as a neutral reserve asset acceptable to all trading partners, regardless of geopolitical alignments

This trend creates persistent underlying demand for gold from official sector buyers that is relatively price-insensitive compared to other market participants, as detailed in recent analyses of who's buying gold.

Potential Supply-Demand Imbalance

Current central bank buying patterns suggest a potential supply constraint that could significantly impact prices over the long term.

"To increase reserves from 15% to 30% gold allocation, central banks would collectively need to absorb several years of global mine production," notes Lanci. "This creates direct competition with other market participants for available supply."

The supply-demand dynamics include several critical elements:

• Global gold mine production has plateaued at approximately 3,200 tonnes annually
• Central bank demand exceeded 1,100 tonnes in 2024, representing over one-third of annual production
• Mining output cannot be rapidly increased to meet demand surges due to geological and regulatory constraints
• Average discovery-to-production timelines now exceed 15 years for major gold projects

These factors create a potential structural deficit in gold supply that could persist for years, supporting a bullish long-term outlook for prices, according to analysis from the World Gold Council.

Investment Rotation Into Resource Sectors

Evidence suggests the beginning of a potential rotation of investment capital into resource sectors after years of underperformance relative to technology and financial assets.

"Precious metals miners are showing relative strength despite consolidation in metal prices," explains Lanci. "This typically indicates early-stage investor interest ahead of broader market recognition."

Signs of this rotation include:

• ETF inflows remain modest relative to previous bull markets, suggesting substantial potential for increased participation
• Generalist funds are increasing mining sector allocations from significantly underweight positions
• Junior mining financing activity has increased approximately 40% year-over-year
• The current cycle appears to be in its early-to-middle stages compared to historical patterns

This potential rotation is particularly significant given the historically small size of the precious metals mining sector relative to broader equity markets, where even modest capital inflows can drive outsized price movements.

FAQ: Critical Questions About the Gold Market

Why is China becoming more dominant in gold trading?

China's increasing dominance in gold trading reflects several converging factors. The country's strategic interest in reducing dollar dependence has led to policies encouraging gold accumulation at both state and private levels. Growing domestic investor demand, particularly as property markets have cooled, has directed capital toward precious metals. Additionally, China has developed sophisticated trading infrastructure through the Shanghai Gold Exchange that offers competitive advantages including lower costs, greater liquidity, and trading hours that align with Asian market participants.

"What we're witnessing isn't just market evolution—it's a deliberate strategy to establish price discovery mechanisms outside Western financial systems," explains Lanci. "Shanghai's growing dominance represents a fundamental power shift in precious metals markets."

What caused the delivery delays in Western gold markets?

The extension of delivery times from the standard T+2 to as much as 92 days in London markets appears to have resulted from a combination of factors. Logistical challenges following pandemic disruptions created initial bottlenecks in the physical supply chain. More concerning for market participants was the possibility that rehypothecation—the practice of using the same physical gold to back multiple paper claims—may have created systemic vulnerabilities when demand for physical delivery increased. Regulatory interventions designed to stabilize markets may have inadvertently exacerbated these issues by restricting normal arbitrage mechanisms.

These delays raised fundamental questions about the relationship between paper gold contracts and physical metal availability that continue to influence market structure.

How might gold miners capitalize on current market conditions?

Gold miners can capitalize on current favorable conditions through several strategic approaches. With prices at multi-year highs and production costs relatively contained, companies have opportunities to implement strategic hedging programs that lock in favorable forward prices. This secures cash flow visibility that can fund exploration and development without dilutive equity raises. The combination of high gold prices and relatively low energy costs (a major input cost) creates exceptionally favorable margins that can be reinvested in resource expansion or returned to shareholders through dividends.

Companies with development-stage projects have particularly strong opportunities to secure financing on favorable terms, potentially accelerating projects that were marginally economic at lower gold prices.

What would trigger the next major move higher in gold prices?

The next major move higher in gold prices could be triggered by several potential catalysts. A quarterly close at new highs could attract institutional investment flows from managers who rely on momentum and trend-following strategies. Escalation of geopolitical tensions in key regions might accelerate central bank diversification away from dollar-denominated assets. Unexpected monetary policy shifts, particularly any sign of reduced commitment to anti-inflationary policies, would likely drive investment demand.

Many analysts believe a potential breakout in silver prices above key resistance levels could create contagion effects in gold,

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