China Says “Thanks for the Gold!”

While the headlines continue to validate my skepticism regarding any peace deal with Iran, metals bulls might be justified in feeling singled out for punishment today.

Because while the rest of the “risk assets” are up, gold and silver are taking it on their respective chins, with both metals down about 1.5% as I write.

The good news, such as it is, is that gold has remained above the key $4,000 line, after rising back above it late last week.

That drop below $4,000 last week came after a harsh $110 sell-off last Wednesday. In a dispatch to our Gold Newsletter Alert subscribers the next day, I noted,

“I’ve seen this movie before, many times. And while I can’t call a bottom yet and would be foolish to try… it sure felt like one yesterday.”

As always, we’ll see down the road. But for some time, it seemed like gold was aiming to break that key support line, to drive out as many weak hands as possible.

Those short-timers are out of the market now, and they’ve joined a parade of Western traders who have abandoned gold for the excitement of the AI plays and other crazes du jour.

A few charts illustrate precisely what’s been happening in the gold market. Let’s start with the gold ETFs and trusts, where mostly traders hold their gold in paper form:

As you can see in this chart taken from Nick Laird’s great GoldChartsRUs.com site, total gold holdings in the world’s ETFs and other funds have endured significant, steady drawdowns since the U.S.-Iran conflict began.

Again, this is because of the effect of the conflict on oil prices, and thence inflation, and ultimately Fed policy. And Fed policy drives everything for traders.

But there’s more....

Here we see where Nick also dutifully tracks gold open interest on the COMEX. While open interest has risen in recent weeks, likely due to increased shorting, it remains at historically low levels. In fact, a longer-term chart would show that open interest is at peak apathy — the lowest levels in decades.

All this points to the simple fact that Western investors have all but given up on gold. And because Western markets continue to set the price, well… you’ve seen the charts.

Now here’s where it gets interesting.

While the West is setting the gold price, China has been taking it. Consider this chart, which has received a lot of interest in recent days:

As you can see, China’s gold imports have risen to the highest levels in two years. As Bloomberg reports:

“Imports were around 163 tons last month, the highest since March 2024, according to customs data released on Saturday. Volumes for the first five months of 2026 were about 692 tons, up by about 76% from a year earlier.”

Last week, I told you that we remain in a bull market for gold. Not only that, but the irrefutable math behind debts, deficits, and the costs of servicing both argues that this will be the biggest and most impactful bull market in our lifetimes.

My advice remains the same: In a bull market, buy the dips.

That’s what China’s doing, and we should take their lead.

To get Brien Lundin’s ongoing commentary on the markets at no charge, click here to subscribe to his free Golden Opportunities newsletter.

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