**China’s Gold Demand Dynamics** Gold demand in China has risen, with 352 tons of gold bars and coins sold, marking a 24.5% increase from last year. This figure represents more than half of the country’s total gold demand. The People’s Bank of China (PBoC) has now bought gold for twelve straight months, adding about 1 ton in October. Over the year, the PBoC has gathered 40 tons of gold. In contrast, central banks in countries like Poland and Kazakhstan have purchased significantly more gold this year. This shows differing strategies and levels of gold buying among various nations. As of November 11, 2025, we observe a noticeable split in gold demand from China. A 8% decrease in overall demand is mostly due to a sharp decline in the jewelry sector, which is struggling due to high prices and new taxes that just started. With gold priced at about $2,550 an ounce, this consumer weakness may cap any quick price gains. **Investment Demand and Trading Strategies** On the other hand, strong physical investment demand is creating a solid base. Chinese investors have boosted their purchases of bars and coins by nearly 25%, showing they are seeking safety amid domestic economic uncertainty. This demand for tangible assets, rather than discretionary spending, indicates that significant price drops will likely be met with strong buying support. The PBoC continues to build its gold reserves gradually, but the main story is about global central banks. Since 2023 and 2024, they have been actively buying gold, with the World Gold Council reporting that central banks around the world added over 800 tons to their reserves in the last year, which supports the market. This ongoing demand is a crucial reason we don’t see any bearish trends. The contrast between weak consumer demand and strong investment demand complicates trading. The CBOE Gold Volatility Index (GVZ) is currently around 19, indicating that the market isn’t anticipating a major price surge, but mixed signals could lead to sudden changes. We believe this situation isn’t ideal for straightforward bets using futures. In the coming weeks, we see chances in selling premiums instead of just trying to predict price direction. Selling out-of-the-money puts or using bull put spreads with a strike below $2,500 seems promising. This strategy benefits from time decay and strong physical demand likely to support that price point. On the flip side, the weak demand for jewelry, further impacted by recent retail sales data showing only 2.5% growth in China, makes a significant price breakthrough less likely. Selling covered calls on our existing long positions or employing bear call spreads could effectively generate income, taking advantage of the resistance anticipated as prices try to rise. We also note a divergence in sentiment with Western markets; major gold ETFs like GLD saw nearly $500 million in net outflows in October. This hesitance from paper markets contrasts sharply with the physical accumulation in the East, reaffirming our belief that the market is currently range-bound, caught between two very different narratives. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now