FirstFT: Chinese Speculators Drive Record Gold Rally

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Roula Khalaf, editor-in-chief of the FT, selects her favorite stories in this weekly newsletter.

Good morning. We begin today with the explosion of gold trading activity in China, which has helped drive the precious metal’s record rise this month.

Massive bets by Chinese speculators on rising gold prices have spurred the rally, a sign that Asian traders are beginning to eclipse their Western counterparts in their influence over the gold market.

Long gold positions held by futures traders on the Shanghai Futures Exchange (SHFE) rose to 295,233 contracts, the equivalent of 295 tonnes of gold. This represents an increase of almost 50 percent since late September, before geopolitical tensions erupted in the Middle East.

Gold volumes on SHFE increased by more than five times last year’s average, to 1.3 million lots on last week’s peak trading day. Analysts said the trading frenzy helped explain the ferocity of gold’s record rally above $2,400 a troy ounce this month.

“Chinese speculators have really grabbed gold by the throat,” said John Reade, chief market strategist at the World Gold Council, an industry body. Here are some of the companies making bullish bets.

And here’s what I’m keeping an eye on today:

• Economic data : Japan and Australia release monthly inflation figures, while the Bank of Korea releases its consumer confidence index.

• US-China Relations: US Secretary of State Antony Blinken is visiting China in the latest effort by the two countries to manage strained relations.

• Indonesia Rate Decision: The possibility of a rate hike has increased to arrest the recent fall in the rupee.

• Results: Hong Kong Exchanges and Clearing, Samsung C&T, Boeing and Canon are among those reporting their first quarter results.

Five other headline news

1. Hong Kong’s biggest IPO of the year failed yesterday as shares of Chinese bubble tea chain ChaPanda fell 38 percent from their listing price on their stock market debut. ChaPanda, also known as Chabaidao, has raised nearly HK$2.6 billion (US$331 million), with shares valued at HK$17.50. These poor performances come at a time when the city is struggling to revive its stock market.

2. Elon Musk has vowed to appeal an Australian court order allowing footage of a violent attack in Sydney to be cleaned up. from his social media platform X, accusing Prime Minister Anthony Albanese’s government of censorship. At least four people were injured in last week’s attack on an Assyrian church, which police described as a “terrorist incident” and “religious extremism.” Read more about the dispute between Musk and Canberra.

3. Police arrested an employee working for a far-right German member of the European Parliament, accused of spying for Beijing. The employee was accused yesterday by Germany’s federal prosecutor of being secretly employed by China’s Ministry of State Security, the latest suspected Chinese agent to be unmasked, an alarming trend for security authorities across the continent .

4. Exclusive: India seeks to strengthen its access to essential minerals such as lithium, as it races to catch up with rivals, including China, in the race to build next-generation energy supply chains. New Delhi is pushing state mining groups to search for mineral reserves in South America and Africa and launch tenders to develop domestic mining blocks, a government official told the FT.

5. Jamie Dimon, chief executive of JPMorgan Chase, said the U.S. economy was “booming” but warned he was “cautious” about a soft landing.. In a lengthy interview with the Economic Club of New York yesterday, Dimon also praised Indian Prime Minister Narendra Modi, who is campaigning for another five-year term.

In-depth news

Jeff Yass’ Susquehanna International Group first invested $80,000 in ByteDance, the Chinese owner of TikTok, based on an idea drawn on a napkin in a Beijing cafe more than a decade ago. His global quantitative trading company followed up with another $2 million a few months later – a stake that is now worth around $40 billion and represents a significant portion of Yass’ wealth. But the Republican donor’s fortune is now hostage to growing political tensions between the United States and China. Under pressure, he goes on the offensive.

We also read. . .

• China-Russia trade: On paper, trade ties between the two countries seem enormous. But their business friendship may not be quite what you think, writes Agathe Demarais of the European Council on Foreign Relations.

• Secret of sleep: Bamboo pajamas and sensors in beds: while scientists seek to explain the mechanisms of sleep, companies can continue to exploit our fatigue, writes Leo Lewis.

• When to loosen: An upcoming ECB interest rate cut would make sense, but the Fed faces a tougher decision in the US, writes Martin Wolf.

Chart of the day

Age discrimination is particularly apparent in China’s tech sector, where older employees are widely seen as less willing to endure the infamous 996 schedule, or 9 a.m. to 9 p.m., six days a week. Tech executives are open about their preference for young people, a trend that has only increased with the gradual waves of job cuts in the tech sector, driven by the economic downturn and regulatory concerns.

Take a break from the news

How to make working from home wonderful, asks Rhodri Marsden. He recommends a treadmill, Razer’s latest chair, a hi-fi speaker and Apple’s latest MacBook Air, and much more.

Additional contributions from Nora Redmond and Irwin Cruz