Gold Hits Record as China Launches Insurer Pilot Program

Gold prices reached an all-time high of $2,941 per ounce on Tuesday as China began a pilot program allowing insurance companies to invest in the precious metal for the first time.

Beijing’s trial permits ten major insurers to allocate up to 1% of their assets to gold trading, creating potential investment flows of 200 billion yuan ($27.4 billion), according to Minsheng Securities calculations.

Industry leaders PICC Property & Casualty Co. and China Life Insurance Co. join eight other firms in the initiative, which began Friday. Chinese regulators authorized insurers to invest in commodities, while maintaining strict limits on other investment options.

Multiple factors drive the current gold rally, including anticipated US Federal Reserve interest rate cuts, central bank purchases, and market adjustments to Donald Trump’s trade policies.

“Insurance companies lack options for mid- and long-term assets with stable yields,” Guotai Junan Securities analysts wrote, led by Liu Xinqi.

JPMorgan Private Bank’s global market strategist Yuxuan Tang expects cautious deployment of the new allowance. “We are more likely to see accumulations when price rallies take a pause,” Tang said, citing institutional investors’ focus on returns.

Beijing launched the gold initiative as part of an effort to counter property market weakness and boost economic growth.


Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

Giant Mining Encounters Native Copper As Hole MHB-34 Hits 563 Metres Depth

Verses Hits Commercialization Stage With Genius AI Platform

Related News

China’s Treasury Holdings Soar to Highest in 3 Years

Chinese holdings of US Treasuries increased to the highest since 2019, amid rising yields and...

Friday, April 16, 2021, 10:33:00 AM

Great Bear Increases Flow Through Financing To $69.9 Million

Great Bear Resources (TSXV: GBR) apparently has seen strong demand for the flow-through financing it...

Thursday, January 21, 2021, 07:36:16 PM

Lundin Mining Slashes Candelaria Production Guidance

Lundin Mining Corporation (TSX: LUN) this morning reported that production guidance for 2021 at its...

Monday, June 21, 2021, 07:46:27 AM

Retail Turns To Silver: Metal Has Several Positive Attributes Versus Gold

In the stock market frenzy around stocks such as GameStop, AMC Entertainment, and Blackberry, numerous...

Monday, February 1, 2021, 10:34:00 AM

Your Next African Gold Mining Champion | Peter Marrone – Allied Gold

In this interview, Peter Marrone, CEO of Allied Gold (TSX: AAUC), outlines the company’s growth...

Saturday, February 1, 2025, 11:34:00 AM