Gold Sinks in Shock Selloff as Stock Rout Spurs Robot Trading

Market Impact - Gold and silver prices have edged lower as investors assess the impact of market closures in China for the Lunar New Year holiday, with bullion falling as much as 0.8% after a previous advance [2] - The Shanghai Gold Exchange and the Shanghai Futures Exchange will close for the holiday period from the end of Friday until February 24, which will test the market due to the absence of Chinese traders [3] Demand Dynamics - Demand for silver in China has been intense, with domestic producers and traders struggling to clear a backlog of orders, leading to near-delivery contracts on the Shanghai Futures Exchange trading at a significant premium [4] - Historically, precious metals have performed strongly in the 10 days leading up to the Lunar New Year, with price support often persisting during and after the holiday [5] Regulatory Changes - The Shanghai Futures Exchange has adjusted its rules to prevent certain businesses holding silver futures for hedging from carrying contracts through to delivery, aiming to curb outflows from exchange warehouses amid extreme supply tightness [6] Price Trends - Gold has remained above $5,000 an ounce, recovering roughly half of the losses from a historic rout at the beginning of the month, with a record surge above $5,595 in late January before a speculative buying wave caused a 13% tumble [7] - Many banks expect gold to resume its upward trend, citing ongoing drivers such as geopolitical tensions and a shift away from traditional assets, with BNP Paribas projecting bullion at $6,000 an ounce by year-end [8]