From Shanghai to Wall Street: Why Gold’s Run Isn’t Over Yet

Key Highlights:

• Gold consolidates at $3,302/oz after touching $3,500/oz last week.
• April demand hits post-2016 highs, led by China’s 30% jump in bar and coin buying.
• Billionaire John Paulson forecasts $5,000/oz by 2028 on central bank accumulation.
• ETFs, U.S. mining plays, and geopolitical hedging drive sustained demand.

Gold continues to glitter under pressure, holding its ground above $3,300 an ounce even as short-term consolidation kicks in following a record-breaking rally. As of today, spot gold is trading at $3,302.78, down 0.43% from the previous session but still up 6.82% over the past month and a remarkable 25.86% year to date.

Despite today’s modest decline, the broader trend remains firmly bullish. Over the last year, gold prices have climbed an astounding 41.47%, with analysts and heavyweight investors alike now projecting much higher ceilings.

Paulson's Bold $5,000 Call Adds Fuel to the Fire

Among the most notable forecasts is that of billionaire hedge fund manager John Paulson, who believes gold could hit $5,000 per ounce by 2028. “It’s a well-informed prediction,” Paulson said, citing a growing lack of faith in U.S. dollar dominance and a global pivot toward hard assets.

Paulson attributes the surge in gold buying to rising geopolitical tensions and lessons drawn from recent history—namely the Western seizure of Russia’s reserves after its invasion of Ukraine. “Russia’s gold was untouched. That’s what woke up the rest of the world’s central banks,” he said. “They now realize treasuries aren’t always safe.”

Paulson, who recently acquired a 40% stake in NovaGold’s Donlin project in Alaska and is the top shareholder in Idaho-based Perpetua Resources, is doubling down on gold-focused U.S. mining ventures. His bet: the next chapter of gold's rise will be American-led and geopolitically shielded.

But perhaps no player in the gold market is more consequential right now than China.

Why Is China Buying So Much Gold?

In the first quarter of 2025, China’s gold bar and coin consumption surged 30% year-over-year, according to the China Gold Association. Both private investors and state institutions are driving this demand, accelerating a trend that has quietly been building for over 15 years. But as Joseph Cavatoni, senior market strategist at the World Gold Council, notes—this buying spree has “amplified significantly” since the start of President Donald Trump’s second term.

The rationale is deeply geopolitical.

As the primary target of Washington’s aggressive tariff policy, China has borne the brunt of over 145 duties on its exports. While exempted from the 90-day pause on reciprocal tariffs, China continues to face mounting restrictions on its goods entering the U.S. and a rising perception of economic confrontation.

The result: a strategic retreat from dollar-based assets in favor of physical gold.

"When the war started [in Ukraine], Russia kept their physical gold that was safe but all their cash reserves were confiscated," Paulson noted. "So that caused other central banks to wake up and say... 'Could the U.S. do that to us?'"

China appears to be taking no chances. Recent estimates suggest that while the People’s Bank of China officially reports holdings of 2,292 tonnes, analysts believe the actual figure may exceed 30,000 tonnes, a strategic reserve shrouded in deliberate ambiguity.

As Adrian Ash, Director of Research at BullionVault, explains, “It’s basically impossible to assess how much is going into China’s reserves. Nobody really believes what they officially report.” That opacity, in itself, is a form of financial signaling—part of a broader bid to insulate the Chinese economy from the unpredictability of U.S. policy and prepare for a multipolar monetary system.

The China Gold Association put it bluntly:

“Complex and changing geopolitics and economic uncertainty have further highlighted the hedging and value preservation functions of gold.”

Central Banks and U.S. Investors Follow Suit

China isn’t alone. Global central banks purchased 244 tonnes of gold in Q1, continuing a multiyear trend of diversifying away from U.S. dollar holdings. Paulson himself is acting on the thesis—investing heavily in American mining projects such as Perpetua Resources and NovaGold’s Donlin project in Alaska.

These aren’t speculative moves. Perpetua is positioned as a dual supplier of gold and antimony—a critical mineral for U.S. defense manufacturing, currently subject to Chinese export restrictions. With support from the U.S. Export-Import Bank and the Trump administration, Paulson’s investments aren’t just financial, they’re geopolitical.

Source: World Gold Council - Gold Demand Trends: Q1 2025

Investment Demand at Record Highs

Q1 2025 saw gold demand rise to 1,206 tonnes, the strongest first quarter since 2016. ETFs saw 170% growth year-over-year, while bar and coin demand remained strong at 325 tonnes. China’s role in these numbers is outsized: of the $6 billion in ETF inflows across Asia in April, $5.8 billion came from China alone.

Meanwhile, supply remains constrained. Mine output inched up to 856 tonnes, a Q1 record, while recycling declined by 1% as consumers opted to hold onto gold amid expectations for higher prices.

Where Does Gold Go from Here?

Forecasts from Deutsche Bank ($3,700/oz) and JPMorgan ($4,000+/oz by 2026) suggest a continued upside trajectory. Paulson’s $5,000 call may seem extreme—but in a world tilting away from dollar dominance and toward hard assets, it’s no longer implausible.

“Gold’s resilience in the face of easing trade tensions shows the market is still nervous,” said Frank Watson of Kinesis Money. “That reluctance to fall much further is very telling.”

In truth, gold has evolved. It’s no longer just a hedge against inflation or recession—it’s becoming a symbol of sovereignty, independence, and monetary insurance. China knows this. Paulson knows it. And increasingly, so does the market.