During the Spring Festival holiday, gold and silver prices exhibited significant volatility, resembling a rollercoaster pattern.
Specifically, spot gold prices declined for two consecutive days on February 16 and 17. Subsequently, from February 18 to 23, prices rose for five straight trading days, driven by uncertainty surrounding U.S. trade policies and escalating tensions in Iran, which prompted investors to seek safer assets.
Silver demonstrated even more pronounced fluctuations during the holiday period, accumulating a nearly 17% increase. Over six trading days, four sessions saw price swings exceeding 4%. Notably, on February 20, silver surged by 8.19%, with an intraday amplitude surpassing 9%. As of 17:30 Beijing time on February 24, gold prices briefly climbed above $5,237 per ounce, while silver reached a high of $88.9 per ounce. Due to the sharp rally in silver during the holiday, the SDIC Silver LOF fund hit its daily price limit on the 24th.
Several gold retailers announced plans to raise prices in the near term. The Spring Festival period is a peak season for precious metal consumption. A salesperson at a gold store in Guangzhou's Beijing Road commercial district noted that despite minor price fluctuations during the holiday, public enthusiasm for purchasing gold remained strong. One consumer reportedly made a single purchase nearing 80,000 yuan, primarily for daily wear. In the trendy Tianhe business district, lightweight, creatively designed cultural "light gold" products with smaller weights were particularly popular, with many post-1995 consumers emerging as a new driving force.
Beyond personal use, consumers also favored gold jewelry as New Year gifts for relatives and friends, with small gold bars weighing around 10 grams being the most sought-after. A Guangzhou resident, Mr. Tan, mentioned purchasing gold bars annually as a long-term investment for his son, prioritizing cost-effectiveness over high-margin decorative pieces.
Following the holiday, Shanghai gold and silver futures, which resumed trading on the 24th, experienced catch-up gains. The main Shanghai gold contract rose by 3.5%, while Shanghai silver surged by 12.7%.
Tang Linmin, a senior researcher at China International Futures, attributed the post-holiday rise in domestic gold prices to three main factors: First, the resurgence of Trump-era tariff influences. During the holiday, a ruling deemed former President Trump's broad global tariff policies illegal, triggering a series of responses from his administration, including announcements of temporary 10% import tariffs on global goods, with threats to raise rates to 15%. Further reports suggested considerations for broader "national security tariffs" affecting various industries, injecting significant uncertainty into global trade and fueling safe-haven demand.
Second, renewed tensions concerning Iran. Although optimistic signals emerged from U.S.-Iran negotiations during the holiday, these were quickly overshadowed by reports of U.S. military preparations for potential strikes against Iran.
Third, internal divisions within the Federal Reserve also supported gold. The released minutes from the Fed's January meeting indicated substantial internal disagreements, and recent remarks from Fed officials presented a mixed hawkish-dovish stance, reducing the likelihood of a March rate cut but maintaining uncertainty over longer-term policy outlook, which benefits gold.
Qu Rui, Senior Associate Director of the Research and Development Department at Golden Credit Rating, stated that international gold prices broke through the $5,200 per ounce mark, hitting a three-week high, primarily due to concentrated safe-haven demand driven by renewed U.S. tariff uncertainties and escalating U.S.-Iran geopolitical risks. Despite planned talks on the 26th, reports of the U.S. considering preliminary military action against Iran heightened market jitters, further boosting gold prices. Additionally, the overall rise in international gold prices during the holiday also contributed to the increase in domestic prices upon market reopening.
Recently, the World Gold Council's 2025 "Global Gold Demand Trends Report" revealed that total global gold demand (including over-the-counter transactions) surpassed 5,000 tons for the first time, reaching a record 5,002 tons. Combined with gold's record-breaking price performance throughout the year, the total value of global gold demand soared to $555 billion, a 45% year-on-year increase. For the full year, the primary drivers of robust investment interest in gold were safe-haven demand and asset diversification needs.
Specifically, global gold investment demand increased to 2,175 tons, becoming the main driver for the record annual demand. Globally, investors seeking safety and diversification flocked to gold ETFs, with holdings increasing by 801 tons over the year, marking the second-highest annual inflow on record. Physical gold investment demand also remained strong, with global bar and coin demand reaching 1,374 tons, valued at $154 billion, hitting a 12-year peak. Global central bank gold purchases reached 863 tons in 2025, remaining historically high, though the pace of buying slowed compared to the previous three years.
Following the rise in gold prices, jewelry stores are following suit with price increases. Laopu Gold's Taobao flagship store recently issued a price adjustment notice, indicating product price changes effective February 28, 2026. Details will be based on actual pricing in stores and online. Laopu Gold raised prices three times in 2025, with the first increase last year also occurring after the Spring Festival, ranging from 5% to 12%.
Chow Tai Fook also reportedly plans to adjust gold product prices after the Spring Festival, potentially starting in mid-March. Some stores have already received relevant notices, with increases focused on fixed-price products, expected to range from 15% to 30%. Specific details and implementation timelines will be confirmed based on in-store price tag adjustments.
The Central Bank of Malaysia resumed gold purchases after more than seven years. Although gold and silver experienced significant volatility early in the year, with gold's year-to-date gain narrowing from nearly 30% to around 20%, and silver's from 64% to 23%, many market participants believe the upward trend for precious metals remains intact. The underlying logic centers on persistent global geopolitical friction and the Federal Reserve's interest rate cutting cycle. As long as this rationale holds, any corrections are viewed as temporary fluctuations within a broader upward trajectory.
UBS reiterated its positive stance on gold, forecasting a target price of $6,200 per ounce for international spot gold in the coming months. Its analysts believe geopolitical risks will remain elevated due to U.S.-Iran tensions, while the Fed's easing cycle is expected to continue, putting pressure on real interest rates. UBS anticipates further gold price appreciation driven by stronger investment flows and ongoing central bank purchases. On the supply side, growth appears constrained. While high prices may incentivize exploration, consulting firm Wood Mackenzie estimates that approximately 80 mines will exhaust their current production plans by 2028, suggesting limited supply elasticity in the short term.
Bank of America's February Global Fund Manager Survey indicated that buying gold was the "most crowded trade" for the second consecutive month. Fifty percent of surveyed fund managers cited "long gold" as the most crowded trade in February, slightly down from 51% in January. Meanwhile, 20% of managers identified buying the largest U.S. tech stocks—Nvidia, Alphabet, Apple, Amazon, Microsoft, Meta, and Tesla—as the most crowded trade.
However, some investment banks argue that the gold rally has deviated from rationality. Citigroup pointed out that current gold prices have already heavily discounted future uncertainties. It significantly lowered its medium-to-long-term gold price forecasts, warning that in a bearish scenario, prices could fall to around $3,000 per ounce. Maximilian Layton, Citigroup's Global Head of Commodities, stated that while short-term spikes are still possible, gold's valuation has reached "extreme levels." He expects that if safe-haven demand collectively recedes in the second half of 2026, the key "pillars" supporting gold prices could face structural collapse.
Citigroup highlighted that the bubble-like characteristics of the current gold price are evident in its decoupling from the real economy. The global annual expenditure on gold as a percentage of GDP has risen to 0.7%, the highest level in 55 years, significantly exceeding the peak during the 1980 oil crisis bull market. Furthermore, the current price has completely detached from the marginal production costs of mining. Research reports indicate that profit margins for high-cost gold miners are at their highest in 50 years, suggesting the price surge is not driven by increased mining difficulty or rising costs.
According to the latest data disclosed by the International Monetary Fund (IMF) on February 17, Bank Negara Malaysia (the Central Bank of Malaysia) increased its gold holdings by 3 tons in January 2026, raising its total official gold reserves to 42 tons. This marks the first expansion of its gold holdings since October 2018, resuming gold purchases after a hiatus of over seven years.
The world's largest hedge fund, Bridgewater Associates, disclosed its latest U.S. stock holdings report (13F). The filing showed that its total portfolio value reached $27.4 billion as of December 31, up from $25.5 billion in the third quarter. During the reporting period, Bridgewater continued its focus on the AI theme, increasing stakes in popular AI-related stocks like Nvidia, Amazon, and Micron Technology. Concurrently, against the backdrop of strong gold prices, Bridgewater also increased its holdings in Newmont Corporation, one of the world's largest gold producers. Overall, in Q4 2025, Bridgewater added 191 new positions, increased holdings in 450, reduced holdings in 395, and liquidated 165 positions. Its top ten holdings accounted for 36.33% of the total portfolio value.