Editor’s Note
This article examines the volatile price movements in the global precious metals market during the recent Chinese New Year holiday, highlighting how shifting geopolitical tensions and safe-haven demand drove a sharp correction followed by a strong rebound.
During the Chinese New Year holiday, the global precious metals market experienced a rollercoaster ride, initially falling before rebounding, driven by fluctuating U.S.-Iran geopolitical tensions and rising safe-haven demand.
At the start of the holiday, escalating U.S.-Iran geopolitical conflict triggered a deep correction in gold and silver prices. However, safe-haven sentiment resurged in the latter part of the week, leading to a strong rebound in international gold prices. On February 23, gold and silver prices opened with sharp gains. Spot gold broke above $5,170, rising over 1% intraday. Spot silver surged over 3%, climbing past $87.
Hong Kong stock market’s gold sector reacted first on February 23. Shares of Tongguan Gold (00340.HK) rose over 11% intraday, China Gold International (02099.HK) gained nearly 7%, and Zijin Mining International (02259.HK) increased over 7%.
The A-share market will open on February 24. The convergence of price gaps between domestic and international markets and the ongoing geopolitical risks are expected to be the core variables influencing domestic gold prices and related gold assets.
Nanhua Futures analysis indicated that at the beginning of the week, Iran’s foreign minister stated that Iran and the U.S. had reached an agreement on “guiding principles” for negotiations, causing international gold prices to retreat from highs, with silver adjusting in sync.
On February 17, the international spot gold price fell to a low of $4,841 per ounce. Traders viewed this correction primarily as a result of short-term profit-taking, not a fundamental reversal of the trend.
Entering the latter half of the holiday, the precious metals market quickly recovered losses and hit new highs. Renewed geopolitical tensions became the core driver pushing prices higher, with gold regaining favor as a traditional safe-haven asset.
Additionally, the U.S. Supreme Court’s ruling on February 20 that the Trump administration’s large-scale tariff policy was illegal also provided some support to metal prices, leading to renewed safe-haven inflows into gold.
CFTC data shows that for the week ending February 17, speculators on COMEX gold increased their net long positions by 3,020 contracts to 96,057 contracts.
The world’s largest gold ETF, SPDR Gold Trust, reported holdings of 1,078.75 tonnes as of February 20 (last Friday), a weekly increase of 1.72 tonnes.
Besides gold, platinum and palladium also saw significant gains during the holiday. NYMEX platinum and palladium showed strong, volatile performance. As of February 20, the NYMEX platinum main contract settled at $2,171.4/oz, up 5.02% from the February 13 closing price; the NYMEX palladium main contract settled at $1,786.5/oz, up 3.75% from the February 13 close.
Xinhu Futures believes that during the domestic holiday, overseas markets traded around U.S.-Iran negotiations. Initially, the market generally adopted a cautious wait-and-see attitude, with safe-haven sentiment slightly dominant. Although the U.S.-Iran talks yielded no substantive results, negotiations will continue. Additionally, weaker-than-expected U.S. GDP growth and renewed expectations for interest rate cuts led to a decline in the U.S. dollar index, factors which all contributed to the rebound in metal prices.
For the post-holiday domestic market, institutions generally predict a pattern of “gapping higher at the open.”
Before the Spring Festival holiday, Shanghai gold futures settled at 1,100 yuan per gram. Due to the surge in overseas gold prices during the domestic market closure, a price gap of approximately 45-50 yuan per gram formed between domestic and international prices, providing room for a catch-up rally after the holiday.
The aforementioned trader also cautioned that gold is currently highly sensitive to risk pricing, with geopolitical conflicts and central bank gold purchases being the core drivers. Investors need to closely track the progress of U.S.-Iran negotiations and rationally view the divergence between short-term impulsive moves and medium-to-long-term trends.
From a medium-to-long-term perspective, foreign institutions’ bullish outlook on gold remains unchanged.
Goldman Sachs’ latest view suggests that continued gold purchases by central banks, combined with private investors increasing gold allocations to bet on Fed rate cuts, will push gold prices to $5,400 per ounce by the end of 2026, indicating clear long-term upside potential.
Bank of America’s February Global Fund Manager Survey shows that “long gold” has become the world’s most crowded trade for the second consecutive month, reflecting persistently high institutional allocation enthusiasm for gold assets.
