Gold peaks above $5,000 as Hong Kong expands gold trade with mainland China

Hong Kong’s government plans to broaden its bullion trade after signing a cooperation deal with mainland China’s gold exchange, as the special metal rises to a new all-time high price.

On Monday, the special administrative city signed an agreement with the Shanghai Gold Exchange during the annual Asian Financial Forum, according to official statements released by the city. 

Under the memorandum of understanding, the Shanghai Gold Exchange will help Hong Kong establish a new, centralized precious metals clearing infrastructure. The partnership includes technical support, regulatory input, and risk management assistance in creating the Hong Kong Precious Metals Central Clearing Co.

Gold prices climbed above $5,000 per ounce for the very first time, extending a rally that saw prices go up by more than 60% in 2025.

Hong Kong unveils gold ambitions with China’s support 

According to Nikkei Asia, the soon-to-be-launched clearing company will become the main system for gold transactions in the city. Government officials said in the ceremony that trial operations will begin later this year, once regulatory approvals and operational arrangements are completed.

An agency under China’s central bank, the Shanghai Gold Exchange, will help draft rules and approve institutions seeking to provide gold trading services. 

The new facility will provide efficient and reliable clearing services for gold transactions in compliance with international standards.

Hong Kong Chief Executive John Lee.

Hong Kong’s Secretary for Financial Services, Christopher Hui, is slated to chair the company. At the same time, a representative from the Shanghai Gold Exchange will become deputy chair, according to people familiar with the arrangement.

The People’s Bank of China will support the Shanghai Gold Exchange in participating in the development of Hong Kong’s gold clearing system through various means to help Hong Kong build an international gold trading center and strengthen its connections with the global gold market.

China’s Central Bank Deputy Governor Zou Lan.

Zou also mentioned that the cooperation would make Hong Kong more suitable as an offshore market for China’s digital yuan.

China is both the world’s largest producer and consumer of gold, giving it outsized weight in price formation and physical supply. As of September last year, China held 7.7% of global gold reserves, according to data from the World Gold Council. 

The country has been a net buyer of gold for 14 consecutive months, and its official holdings to 2,306 metric tons as of last month. The government wants to develop a gold vault with a capacity exceeding 2,000 tons within three years, under the Shanghai Gold Exchange’s physical warehousing management system.

Russian gold shipments to China hit new records

As reported by state news agency RIA Novosti, Russia increased its physical gold exports to China in 2025 to 25.3 tonnes, up 800% from the previous year. Exports jumped 14.6 times to $3.29 billion, a record high for the entire history of gold trade between Russia and China. 

Gold exports to China in December alone reached $1.35 billion, equivalent to a monthly record of about 10 tonnes. Despite the surge, Russia was seventh among China’s gold suppliers by volume last year. Switzerland is still the largest exporter, selling gold worth $25.73 billion to China.

Canada followed with $11.06 billion, while South Africa shipped $9.42 billion. Australia and Kyrgyzstan rounded out the top five exporters, with $8.77 billion and $4.95 billion, respectively.

Meanwhile, Chinese rare-earth metal shares have been rallying, buoyed by supply concerns and policy support from Beijing. Sales and profits from the rare-earth sector are trending higher, as the total net profit for January through September 2025 from about 47 companies already matched the full-year total for 2024.

If current performance continues, the sector’s annual profits are likely to reach the highest level since 2016, according to figures from Shanghai-based information provider Shanghai DZH.

China began restricting exports of seven rare earth elements, including dysprosium, in April 2025. The move preceded the announcement of “reciprocal” tariffs on Chinese goods by an angry US President Donald Trump, whose government is still in talks with Beijing.

In Europe, where prices are particularly sensitive to Chinese supply curbs, dysprosium reached $935 per kilogram in January, according to UK research firm Argus Media.

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