Can gold prices still be bought at this level? Goldman Sachs: In the past ten days, it was mainly "Asian officials" buying, with limited speculative trading; it is still a buying opportunity now

Recently, gold prices have continued to break new highs, rising about 7% since the close on April 8. Many investors are beginning to wonder: with gold prices so high now, is it still a good time to enter the market?

Goldman Sachs' research report on the 17th pointed out that despite the rapid rise in gold prices, there has not been a large influx of speculative funds behind it. The initial decline in gold prices after the stock market drop on April 2 was mainly due to margin calls rather than the establishment of short positions.

In fact, the main reason for the rise in gold prices this time is the active buying by "Asian officials," with most price movements occurring during Asian trading hours. The impact of speculative trading is relatively limited.

Given that speculative positions on COMEX remain at a certain level, Goldman Sachs believes that the current rise in gold prices has structural support and is unlikely to face selling risks in the short term. Therefore, Goldman Sachs considers this a tactical entry point and believes the target price by the end of the year is $3,700 per ounce.

Asian official buying is the main force, Western ETFs and speculative funds have not yet exerted their strength

In early April, due to a sell-off in the stock market, gold prices experienced a brief decline. However, Goldman Sachs' analysis shows that this decline was mainly caused by margin calls rather than a large amount of short selling. Data from the U.S. Commodity Futures Trading Commission (CFTC) also confirms this.

Subsequently, the number of open contracts on COMEX (New York Mercantile Exchange) remained basically stable, indicating that speculative funds did not flood in. Goldman Sachs estimates that of the approximately 7% increase in gold prices over the past ten days, speculative funds only contributed about 1 percentage point.

Meanwhile, since April 8, the inflow of funds into Western exchange-traded funds (ETFs) has also recovered, totaling about 50 tons. However, Goldman Sachs believes that this inflow of funds has only contributed about 1% to the rise in gold prices.

So, who is driving this wave of rising gold prices? Goldman Sachs' analysis shows that "Asian officials" are the real purchasing force. From the price trend, the rise in gold prices mainly occurs during Asian trading hours.

Although the initial demand seems to come from the retail side, including insurance companies buying on dips when gold prices fell, the premium on the Shanghai Gold Exchange (SGE) also saw a brief spike. However, as gold prices continued to rise, retail buying has slowed down.

Goldman Sachs' report specifically points out that on key dates such as April 9, 10, and 16, gold prices experienced vertical rises during Asian trading hours, and the premium on the Shanghai Gold Exchange did not show corresponding fluctuations.

This is because official institutions, including the People's Bank of China, can trade directly in the London over-the-counter market without going through the Shanghai Gold Exchange, thus not affecting the premium on the Shanghai Gold Exchange