Chinese gold exchange-traded fund inflows hit a new daily high last week as rising trade tensions drive demand. Bloomberg data shows nearly 3 billion yuan (US$410M) was invested in China’s four major gold ETFs on Thursday.
In Comex gold futures, speculative interest remains low according to the Commodity Futures Trading Commission. Managed money net longs in COMEX gold fell for the third week, dropping 38,088 lots to 138,465 lots by 8 April, marking the largest weekly decrease since 3 October 2023.
Shanghai Futures Exchange Data
Shanghai Futures Exchange data reveals a reduction in base metal inventories. Copper stocks decreased by 42,795 tonnes for the third week to 182,941 tonnes, the largest since April 2020, with inventories at their lowest since January 2025.
Domestic manufacturers and traders have reportedly bought large copper volumes due to recent price declines. Aluminium inventories also saw a decrease, falling by 9,447 tonnes to 205,627 tonnes over the reporting week.
These developments reflect a rather sharp divergence between growing physical demand and waning speculative appetite. On one side, we’re seeing heavy inflows into Chinese gold ETFs, which tells us that local investors may be moving to hedge or seek safety amid growing concerns around trade frictions. Thursday’s figure alone—around 3 billion yuan—is the highest daily injection recorded, underscoring a decisive shift toward risk-off positioning in the face of macro noise.
Simultaneously, the futures market presents a cooling picture. Latest data from the CFTC shows that managed money continues to pull back from Comex gold. With net long positions in rapid retreat over three weeks, some 38,000 lots were shed by the 8th of April, indicating a notable change in conviction. We’ve not seen a decline near this scale since October last year. The nature of this withdrawal suggests uncertainty or simply a lack of enthusiasm at elevated price levels, potentially aligning with profit-taking behaviour or anticipation of cooler inflation data.
Base Metals Inventory Movement
Turning to the base metals complex, the drawdowns in inventories provide something more tangible to assess. Shanghai data indicates material movement—copper stockpiles have dropped substantially for a third week running. The level, now under 183,000 tonnes, hasn’t been recorded since early 2025, and this comes at a time when manufacturers and merchants are actively restocking. Lower prices appear to have triggered responsive buying.
We’re also noting modest but steady withdrawal in aluminium levels. A drop of nearly 9,500 tonnes puts commercial stockpiles just above the 205,000 mark. This downward trend, although smaller in scale, implies continued draw-driven tightness in supply, particularly relevant to those tracking industrial usage trends.
For near-term positioning, we take two signals. First, physical market participants are stepping in across metals and precious sectors, evidently finding value amid recent price easing. Second, futures traders, at least on the gold side, are scaling down their risk footprint. The contrast between the two worlds—long-term hedging in East Asia and shorter-term speculation in Western exchanges—may create pricing gaps or arbitrage potential.
From where we stand, it’s worth digesting: falling inventories don’t occur in a vacuum, especially when accompanied by active offtake. The copper draw specifically should prompt attention, especially given its correlation with macro growth cycles and seasonal restocking patterns. We’re approaching the point where further downside in price could spark stronger buying from industries still on the sidelines.
Watching positioning shifts will remain high on our radar. With managed money already pulling out sharply from gold, there’s always a trigger point where sentiment can snap back—particularly if inflation data underwhelms or trade flows deteriorate further.
The following sessions may invite more volatility if physical buying pressure continues to outpace futures sentiment.
