Goldman Sachs: Pay attention to this buying spree in gold! Come see the influence of China's power.

Goldman Sachs released a research report stating that the impact of commodity trading advisors (CTAs) on the price of gold on the Chicago Mercantile Exchange (CME) by the Shanghai Futures Exchange (SHFE) was underestimated. On April 22nd, the price of gold rose to $3500 per ounce, and it was evident that short-term algorithmic trading activity had a disproportionate impact on the price. In addition, attention needs to be paid to the physical trading volume on the Shanghai Gold Exchange (SGE), which is at a 10-year high. Goldman Sachs' main points are as follows: On April 22nd, when the price of gold rose to $3500 per ounce, three Chinese brokers collectively traded approximately 212,000 equivalent contracts of the Chicago Mercantile Exchange (CMX) (compared to an average trading volume of about 240,000 contracts year to date), and open interest did not change significantly. Since China's trading hours during the day (when they are most active) have lower liquidity in offshore markets, this short-term algorithmic trading activity clearly had a disproportionate impact on the price. (Information source from the official website of the Shanghai Futures Exchange, shfe.com.cn) Total volume on the Shanghai Futures Exchange/Total open interest on the Shanghai Futures Exchange Gold trading volume: Shanghai Futures Exchange - Chicago Mercantile Exchange As gold is a "flow commodity" without inventory balance issues like oil or copper, the key factor affecting its price is the demand from the Western world (from central banks, imports in China excluding central banks, and subsequent investor purchases). Therefore, attention needs to be paid to the physical trading volume on the Shanghai Gold Exchange (SGE), which is at a 10-year high. Gold: Shanghai Gold Exchange trading volume Furthermore, a positive physical premium appeared when the gold price reached a historic high, which is not common (usually, the market is more price sensitive); is this an early sign of buying behavior related to insurance? Gold: Shanghai Gold Exchange/London gold import arbitrage