Even after gold was hammered last month, China continued to buy.
People’s Bank of China he kept buying gold, continuing his journey 17 months straight in March, according to Reuters. It increased its reserves, as the metal posted its highest monthly decline since 2008.
In a market often filled with extreme fear, that kind of strong demand stands out.
To be fair, that’s no ordinary script for a shiny yellow metal.
Gold is almost always a commodity investors gravitate to when the risk of war rises, and markets become nervous.
However, the war in Iran jolted normal trade, renewed inflationary pressures, fueled fears of growth, and ultimately forced investors to rethink interest rate cuts.
Speaking of rate cuts, veteran economist Jeremy Siegel now believes that rate hikes may be necessary, given the current economic climate.
That combination has hit gold hard, driving down the value of Beijing’s treasuries, making its latest moves all the more interesting.
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Gold: 30 days: -6.35%6 months: + 16.55%1 year: + 48.01%5 years: + 174.82%
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Silver: 30 days: -10.20%6 months: + 47.08%1 year: + 136.10%5 years: + 201.89%20 years: + 497.31%
Source: GoldPrice.org
Gold entered 2026 in tears.
It exploded out of the gates, setting new records in early January, and it was tracking nearly one-fifth of the year’s start behind the 2025 monster.
That big rally was heavily charged with safe-haven demand, dollar outflows, healthy ETF inflows, tight central bank tightening, and tax concerns.
More Gold:
However, when the The war in Iran hit, that simple narrative lost steam.
Higher energy prices eased inflationary pressure, and investors quickly priced in a near-term interest rate cut.
So, we saw a steep March sell-off (biggest monthly decline in years), when the king metal dropped from its highs back to the zone in the $4,000s.
However, despite the pressures, gold has not yet broken.
As China continues to grow, the dollar weakens at times, and the cease-fire headlines cool the relentless pressure on commodity markets, gold has returned to the market. high $4,700s.
The People’s Bank of China lost its gold currency 74.38 million troy ounces at the end of March, up from 74.22 million in February.
That came at a time when the value of those shares effectively fell $342.76 billion from $387.59 billionthe first monthly decrease in the set amount from then on May 2025.
March was a tough month for the yellow precious metal, but China bought the dip.
Three forces can define strategy:
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Gold serves as an insurance reserve when war, inflation, and rate uncertainty affect the markets.
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Big banks care more about accumulated ounces than short-term market losses.
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Formal purchases help stabilize prices in a fair way where private investors tend to back off.
China was not alone, however.
According to the World Gold Council, Poland again Kazakhstan added 20 tons and 8 tons of gold, respectively, in February.
Currently, Uzbekistan we’ve added 16 tons so far this year, too Malaysia added 5 tons between January and February.
Gold is considered a safe haven asset because when we see markets doing well, investors look for something that is not tied to a particular business, government, or earnings report.
Basically, it’s like a storm shelter, where you may need it every day, but when the weather turns nice, it becomes incredibly valuable.
In times of war, trade wars, and fears of inflation, stocks tend to swing wildly, and fiat currencies come under great pressure.
Gold is gaining as it is seen as the ultimate store of value that can hold, even if confidence wanes.
Central banks look at it the same way, but on a much larger scale.
It allows them to diversify reserves, reduce their dependence on the dollar, and build confidence as the global environment worsens.
The next big tests for gold include the upcoming jobs report May 8CPI report on May 12and Fed minutes on May 20.
That setup is very important because at this point, we see the shiny yellow metal trading like a gift-wrapped ratio story in a geopolitical story.
In addition, the latest CPI report showed prices rising 0.9% month to month again 3.3% every year in March, CNN noted. However, the core CPI has entered 0.2% once a month 2.6% per year, according to Barron’s.
That’s important for a ton of gold because hot inflation keeps the Fed on its heels and real yields rise, squeezing non-yielding assets.
Additionally, the labor market has held up well enough to keep the pressure alive.
Wages rose in March 178,000and unemployment plunged 4.3%. Then we have the Fed minutes of March 17-18 which showed that some officials were open to the idea of a rate hike.
Moreover, from a technical point of view, gold has repaired some damage, coming back from all sides $4,655 to $4,790 in later sessions.
So that goes $4,800 as the first major test to be cleared, during$4,800s after that. On the other hand, in between$4,700s then between-$4,600s appear to be the main support zones.
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YTD: SPDR Gold Shares (GLD) + 10.30% compared to the SPDR S&P 500 ETF Trust (SPY) -0.09%
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2025: GLD + 63.68% against SPY + 17.72%
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2024: GLD + 26.66% against SPY + 24.89%
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2023: GLD + 12.69% against SPY + 26.18%
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2022: GLD -0.77% against SPY -18.18%
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2021: GLD -4.15% against SPY + 28.73%
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2020: GLD + 24.81% against SPY + 18.33%
Source: TotalRealReturns annual total return data for GLD and SPY, with reinvested earnings
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This story was originally published by TheStreet on April 12, 2026, where it appeared first in the investing section. Add TheStreet as a favorite source by clicking here.
