Last week saw the price of gold hit $3,400 per troy ounce as the dollar saw its value diminish, driven by growing concerns over geopolitical tensions and shifting global trade dynamics. Despite the closure of the London Bullion Market and Shanghai Gold Exchange for May Day celebrations, the rally in gold prices continued worldwide, reflecting increased investor demand for safe haven assets.
Adding to the momentum, China announced a significant step in expanding its influence over global gold markets. The country will now allow bullion stored in global vaults to be settled against gold trading contracts on the Shanghai Gold Exchange. This move supports China’s broader strategy to internationalize the Yuan and decrease reliance on U.S.-dominated financial systems.
The announcement comes just weeks after the People’s Bank of China urged the Shanghai Gold Exchange to accelerate efforts to globalize its contracts. This initiative aligns with President Xi Jinping’s guidance to strengthen the Yuan’s role in global finance and facilitate cross-border financial services.
As part of the plan, China is extending the Shanghai Gold Exchange’s warehouse network to Hong Kong.
A new vault in the Special Administrative Region will be operated by a Bank of China subsidiary. The Bank of China, one of the biggest commercial banks in China and a founding member of the London Bullion Market Association, plays a key role in these developments.
The geopolitical backdrop has further fueled gold’s appeal. Last month U.S. President Trump introduced controversial ‘Liberation Day tariffs, imposing a whopping 145% duty on Chinese goods. In response, China increased tariffs on American imports to 125%.
The tariff war has intensified concerns about U.S. economic policy and has contributed to a decline in confidence in the U.S. dollar. Speaking at a recent seminar, E. Yongjian, Vice General Manager of the Bank of Communications’ research department, explained that America’s weaponization of tariffs had called into question the safety of U.S. assets and weakened trust in the greenback.
This shift, he added, had increased the appeal of Yuan-denominated assets to investors and was helping advance China’s objective of currency internationalization.
While the Shanghai Gold Exchange launched its international board over a decade ago to allow offshore Yuan holders to trade bullion, initial enthusiasm faded as trading volumes dropped, even after fee waivers and incentives.
Now, however, flows through the Shanghai Futures Exchange and Shanghai Gold Exchange are becoming increasingly influential in shaping global prices of gold, slowly overtaking benchmarks like the U.S. Comex.
China’s expanding role in gold trading and the growing relevance of Yuan-backed exchanges mark a pivotal shift in global financial power, one that continues to gain traction as faith in the greenback diminishes.
The continuing resilience and momentum of gold gives enterprises like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) an opportunity to attract more investors seeking viable alternatives in these turbulent times.
NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF
About MiningNewsWire
MiningNewsWire (“MNW”) is a specialized communications platform with a focus on developments and opportunities in the Global Mining and Resources sectors. It is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled recognition and brand awareness.
MNW is where breaking news, insightful content and actionable information converge.
To receive SMS alerts from MiningNewsWire, text “BigHole” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.MiningNewsWire.com
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
MiningNewsWire
Los Angeles, CA
www.MiningNewsWire.com
310.299.1717 Office
Editor@MiningNewsWire.com
MiningNewsWire is powered by IBN
The start of this week saw prices for gold futures increase as safe haven demand…
SolarBank plans to develop a 7.2 MW DC ground-mount solar project in upstate New York,…
ESGold has identified a large-scale geophysical anomaly in the southwest zone of its Montauban Project…
As the global shift toward clean energy accelerates, solar and wind power are increasingly replacing…
Over the last 100 days since Trump took office, the price of gold has recorded…
SolarBank is developing a 4.584 MW DC ground-mount solar project in upstate New York, projected…