Back in December 2022, with gold trading below $1800/oz, we first discussed the beginning of a precious metal buying-binge from China which as we noted then had emerged as the "Mystery" massive gold buyer after its first official purchase in three years, and noted that the price for physical gold had never been more expensive at the time (while western gold prices were still below their prior record highs). Additionally we noted a curious divergence between the apparent lack of demand for so-called 'paper gold' via ETFs as holdings underlying these vehicles was declining, coupled with a gold price that seemed to have disconnected from ETF holdings and was driven instead by physical demand, or as we noted "the rising interest in gold bars and coins was primarily driven by investors’ safe-haven demand, supported by global geopolitical instability and weak performance of investment products denominated in Chinese yuan.”

In retrospect, not only did we bottom tick the price of gold, which hit a five year low right around the time of our December 2022 article predicting China's relentless buying, but in the 18 months since, the yellow metal has risen by 40%, a staggering appreciation for an asset which is best known for its boring stability.