Gold to Hit $3,000 Sooner Than We Think: China Unleashes $27 Billion for Gold Investment
- forex368 Forex Education
- Feb 10
- 2 min read
Gold’s historic rally is gaining fresh momentum as China’s insurance sector steps into the bullion market for the first time.
A newly launched pilot program allows ten leading Chinese insurance firms, including PICC Property & Casualty Co. and China Life Insurance Co., to invest up to 1% of their assets in gold. This shift could channel up to 200 billion yuan ($27.4 billion) into the precious metal, according to Minsheng Securities Co.
The move signals Beijing’s recognition of the need for alternative investments amid China’s ongoing economic struggles, including a real estate downturn and limited high-yield investment options.
Gold, already up 40% since the end of 2023, stands to benefit significantly from this fresh wave of institutional demand.
Gold Extends Gains to Near Record as Tariffs Spur Haven Buying
Gold is closing in on record highs as trade war fears and tariff threats increase demand for safe-haven assets.
The latest catalyst came as President Donald Trump announced upcoming duties on steel and aluminum imports, fueling global financial uncertainty. Spot gold is now trading near $2,881 an ounce, rising 0.71% as traders seek protection against market volatility.
“Gold remains in a sweet spot, with little standing in its way,” said Westpac Banking Corp. analyst Richard Franulovich. “An unpredictable and disruptive Trump administration, issuing tariff threats at both allies and adversaries, combined with the potential for 100% tariffs on BRIC nations diversifying away from the dollar, is pushing gold’s safe-haven appeal to new heights.”
Traders are also keeping an eye on Federal Reserve Chair Jerome Powell’s upcoming testimony, which could provide clues about the future of U.S. monetary policy.
While Powell is expected to highlight economic resilience, which could theoretically be bearish for gold, geopolitical tensions and inflation concerns continue to drive investor appetite for bullion.
Additionally, China’s central bank expanded its gold reserves for a third consecutive month in January, signaling a strong commitment to diversifying its holdings despite historically high prices. This move, coupled with China's new policy allowing insurers to invest in gold, adds further bullish momentum to the metal’s rally.
Technical Outlook: The Path to $3,000
The technical chart for gold (XAU/USD) shows a strong uptrend, with prices consistently making higher highs and higher lows. The latest breakout above $2,850 confirms bullish momentum, and if spot gold clears resistance at $2,900, we could see a swift move toward the psychological $3,000 mark.
With institutional demand rising, geopolitical risks mounting, and central banks diversifying reserves, the case for $3,000 gold is stronger than ever. Whether due to trade wars, inflation hedging, or financial market uncertainty, gold’s rally appears far from over.