China’s nod for insurers to buy gold seen aiding rally past US$3,000: analysts

China’s decision to allow its insurers to invest in gold will create a new set of buyers and complement purchases by global central banks, potentially driving prices to new heights, according to industry players.

Gold has risen more than 10 per cent this year to a record US$2,954 per ounce (28.3 grams) on Thursday, according to data compiled by Reuters. The increase followed a 26 per cent surge in 2024, the biggest annual gain in 14 years. Goldman Sachs raised its forecast to between US$3,100 and US$3,300 for 2025.

On February 7, Beijing said 10 major mainland-based insurers – including Ping An Insurance, China Life Insurance and China Pacific Insurance – would be allowed to allocate up to 1 per cent of their assets in gold to diversify their investments.

The directive, with immediate effect, could inject “substantial capital into the gold market”, said Joshua Rotbart, managing partner of J. Rotbart & Co, a commodity-trading firm based in Hong Kong. “This move could further support gold prices as it opens a new avenue for institutional investment.”

Inflows could amount to US$27 billion, said Stephen Innes, managing partner of Bangkok-based SPI Asset Management.