Shanghai Gold and Shanghai Silver Year of the Horse "Good Start" Multiple gold shops announce upcoming price increases

21st Century Business Herald Reporter Ye Maishui

During the Spring Festival holiday, gold and silver once again experienced rollercoaster market movements.

Specifically, spot gold prices declined for two consecutive days on February 16 and 17. Then, due to ongoing uncertainty over U.S. trade policies and tense Iran tensions, investors shifted to safer assets, leading to five consecutive days of gains from February 18 to 23.

Silver’s fluctuations during the holiday were even more intense, with an overall increase of nearly 17%. Over six trading days, four days saw volatility exceeding 4%, including an 8.19% surge on February 20, with a price swing of over 9%. As of 5:30 PM Beijing time on February 24, gold briefly rose above $5,237 per ounce, while silver reached a high of $88.9 per ounce. Due to the sharp rise in silver during the holiday, Guotou Silver LOF hit the daily limit on the 24th.

Multiple gold shops announce upcoming price increases

Spring Festival is a peak season for precious metal consumption. A staff member at a jewelry store in Beijing Road, Guangzhou, said that although gold prices fluctuated slightly during the holiday, consumer enthusiasm for buying gold remained high, with some customers spending nearly 80,000 yuan on jewelry mainly for daily wear. In the Tianhe commercial area, where trendsetters gather, lightweight, creatively designed “light gold” jewelry is especially popular. Many post-95s have become new main consumers.

Besides personal wear, consumers also like giving gold jewelry as New Year gifts, with small gold bars around 10 grams being the most popular.

“Buying for my son as a keepsake, 10 grams each year, will be a significant asset when he grows up,” said Mr. Tan, a Guangzhou resident. He explained that he prefers to invest in cost-effective gold bars rather than high-value jewelry.

After the holiday, on the 24th, Shanghai Gold and Shanghai Silver also saw a rebound, with Shanghai Gold rising by 3.5% and Shanghai Silver surging by 12.7%.

Tang Linmin, senior researcher at China International Futures, told reporters that the post-holiday rise in Shanghai Gold was driven mainly by three factors:

First, the impact of Trump’s tariffs re-emerged. During the Spring Festival, large-scale global tariffs implemented by Trump were deemed illegal, prompting a series of responses from the Trump administration, including a temporary 10% import tariff on U.S. imports from around the world, later announced to be raised to 15%. Furthermore, according to CCTV News, U.S. media reported that the Trump administration was considering broader “national security tariffs” covering industries such as large batteries, pig iron and iron fittings, plastic pipes, industrial chemicals, and power grid and telecom equipment. These measures immediately added significant uncertainty to global trade, triggering strong risk-averse sentiment in markets.

Second, tensions with Iran intensified again. Although optimistic reports about U.S.-Iran negotiations circulated during the holiday, they were quickly dispelled by reports that U.S. military forces were prepared to strike Iran.

Third, internal divisions within the Federal Reserve also favored gold. The Fed’s January meeting minutes released during the holiday showed ongoing disagreements within the Fed, and recent statements by Fed officials continued to reflect a mix of hawkish and dovish tones. This reduced the likelihood of a rate cut at the March meeting, but the uncertainty over long-term policy outlooks still supported gold.

Qu Rui, senior vice president of the Research and Development Department at Orient Securities, said that the international gold price surged past $5,200 per ounce, reaching a three-week high, mainly due to renewed U.S. tariff tensions, increased trade policy uncertainty, and escalating geopolitical risks involving the U.S. and Iran, which collectively drove safe-haven demand. Although U.S.-Iran talks are scheduled for February 26, reports that Trump’s government is considering preliminary military strikes on Iran have heightened market risk aversion, further boosting gold prices. Additionally, the overall rise in international gold prices during the spring holiday period also contributed to domestic gold price increases after the market opened on the 24th.

Recently, the World Gold Council released its 2025 “Global Gold Demand Trends Report,” showing that the total global gold demand (including over-the-counter trading) in 2025 first exceeded 5,000 tons, reaching 5,002 tons, a new record high. Coupled with the strong trend of record-breaking gold prices throughout the year, the total value of global gold demand soared to $555 billion, up 45% year-on-year. The main drivers of increased investment interest in gold are risk aversion and asset diversification needs.

Specifically, global gold investment demand increased to 2,175 tons, becoming the main force behind the record-breaking total demand. Investors seeking safe-haven assets and diversification flooded into gold ETFs, with holdings increasing by 801 tons over the year, the second-highest annual increase in history. Physical gold investment demand remained strong, with global demand for gold bars and coins reaching 1,374 tons, valued at $1.54 billion, hitting a 12-year high. Central banks worldwide purchased 863 tons of gold in 2025, remaining at high levels historically, though the pace of central bank purchases slowed compared to the past three years.

Following the price rise, gold shops also increased prices.

Lao Pu Gold Taobao flagship store recently announced a price adjustment, scheduled for February 28, 2026. The specific price changes will be based on actual online and offline prices.

Lao Pu Gold raised prices three times in 2025, with the first adjustment also after the Spring Festival last year, with increases ranging from 5% to 12%.

Chow Tai Fook also announced plans to adjust gold prices after the Spring Festival, possibly starting in mid-March. Some stores have already received notices, with price increases mainly on fixed-price products, expected to be between 15% and 30%. Exact details and timing will depend on in-store price tag adjustments.

Malaysian Central Bank reactivates gold purchase operations after more than seven years

Although gold and silver experienced significant fluctuations early this year, with gold’s annual increase shrinking from nearly 30% to around 20%, and silver dropping from 64% to 23%, many market analysts still believe that the upward logic for precious metals remains intact due to ongoing global geopolitical tensions and the Federal Reserve’s easing cycle. As long as this situation persists, corrections will be just fluctuations, with prices gradually moving higher.

UBS reaffirmed a positive outlook for gold, estimating that the target price for international spot gold could reach $6,200 per ounce in the coming months. Analysts believe that geopolitical risks involving the U.S. and Iran will remain high, and the Fed’s accommodative cycle is expected to continue, putting pressure on real interest rates. Under the influence of stronger investment flows and continued central bank purchases, UBS expects further gains in gold prices. On the supply side, growth appears limited. Although high gold prices may incentivize exploration, consulting firm Wood Mackenzie estimates that by 2028, about 80 mines will exhaust their current production plans, indicating limited short-term supply elasticity.

The February global fund manager survey by Bank of America shows that buying gold has been the most crowded trade for the second consecutive month. About 50% of fund managers said that “long gold” was the most crowded trade in February, down slightly from 51% in January. Meanwhile, 20% of fund managers identified buying major U.S. tech stocks—Nvidia, Alphabet, Apple, Amazon, Microsoft, Meta, and Tesla—as the most crowded trade.

However, some investment banks believe that gold’s recent rise has become detached from rationality.

Citi pointed out that current gold prices have severely overextended future uncertainties, and its significant correction could bring long-term expectations down, warning that in a bear market scenario, gold could fall to $3,000 per ounce. Max Layton, head of commodities at Citi, said that although short-term gold prices might still spike, valuations have reached “extreme levels.” He expects that as risk aversion subsides in the second half of 2026, the “pillars” supporting gold prices could face structural collapse.

Citi also noted that the bubble-like features of current gold prices are first reflected in their detachment from the real economy. Currently, global annual expenditure on gold as a percentage of GDP has risen to 0.7%, the highest in 55 years, far exceeding the level during the “golden bull market” in 1980 amid the oil crisis.

Moreover, current gold prices have completely detached from the marginal production costs of mining. Reports show that profit margins for high-cost gold miners are at their highest in 50 years. This indicates that the surge in gold prices is not driven by increased difficulty or costs of mining.

The latest data from the International Monetary Fund (IMF) released on February 17 shows that Bank Negara Malaysia (Malaysia’s central bank) increased its gold holdings by 3 tons in January 2026, raising its official gold reserves to 42 tons. This is the first expansion of gold holdings since October 2018, marking the reactivation of gold purchases after more than seven years.

The world’s largest hedge fund, Bridgewater Associates, disclosed its latest U.S. stock holdings (13F). The filing shows that as of December 31 last year, Bridgewater’s total U.S. stock holdings were valued at $27.4 billion, up from $25.5 billion in the third quarter. During this period, Bridgewater continued its focus on AI-related stocks, increasing holdings in Nvidia, Amazon, and Micron Technology. Meanwhile, amid the ongoing strength in gold prices, Bridgewater also increased its holdings in Newmont Corporation, one of the world’s largest gold producers. Overall, in the fourth quarter, Bridgewater added 191 new holdings, increased 450 positions, and reduced 395, with 165 positions completely sold off. The top ten holdings accounted for 36.33% of total assets.

(Edited by: Wen Jing)

Keywords: Gold Silver