Spot gold prices fell sharply today, dropping below $3,220.54 per ounce, following significant selling activity by Chinese traders ahead of the May Day holiday. According to Goldman Sachs commodity trader Adam Gillard, nearly 1 million ounces of gold were sold through the Shanghai Futures Exchange and the Shanghai Gold Exchange, almost completely reversing the positions bought last week and resulting in a 5% drop in total onshore holdings from historical highs. This large-scale liquidation contributed to a two-week low in gold prices during Asian trading hours, highlighting the outsized influence of Chinese trading on global price movements. While China’s share of global open interest remains high at about 40%, this selling spree has temporarily capped the metal’s upward momentum
Silver spot prices also retreated, falling to $32.33 per ounce, down $0.29 on the day, as disappointing U.S. and Chinese economic data weighed on the industrial demand outlook. Despite the recent correction, silver remains up over 11% for the year, supported by tight physical inventories and a projected supply deficit for 2025. The sharp reversal in Chinese gold positions underscores the volatility driven by Asian market flows, with analysts noting that gold’s unique status as a “flow commodity” makes it especially sensitive to large, sudden shifts in investor sentiment and liquidity. Both metals remain fundamentally supported by ongoing macroeconomic uncertainty and robust long-term demand, but today’s moves reflect the immediate impact of rapid position unwinding in the world’s largest physical gold market.
