Asian Physical Gold Demand Strongly Recovers, Gold Prices Firm Above $3,000, Silver Rally Continues

Entering August, the international precious metals market continues its high-range operation pattern. As of Asian trading hours on August 5, London spot gold was at $3,025/ounce, up 1.2% from the beginning of the month; spot silver was at $34.8/ounce, up 2.5%, with the gold-silver ratio further converging to around 87. The core driving force for this rally is gradually shifting from macro safe-haven sentiment to the substantive recovery of Asian physical demand.

Asian Physical Demand Becomes Gold's "Ballast Stone"

According to feedback from the World Gold Association and multiple Asian traders, since late July, India and China, the two major gold-consuming countries, have迎来 traditional gold purchase peak season. Pre-stock demand for Diwali and wedding seasons in India was released ahead of schedule, with India's gold imports in July soaring 35% year-on-year, a five-year high for the same period. In China, as gold prices stabilized around $3,000, investors re-entered the market, with gold deliveries from the Shanghai Gold Exchange increasing for three consecutive weeks, gold bar and coin sales increasing by 22% month-on-month.

The Singapore precious metals market is also active. As a Southeast Asian gold trading hub, local physical gold ETF and vault withdrawal volumes have significantly increased. Singapore Bullion Market Association data shows that daily average delivery volume in early August increased by 18% compared to last month, with some dealers reporting temporary out-of-stock situations for retail investment gold bars.

"The return of physical demand has provided a solid bottom for gold prices," said Li Wei, a senior precious metals analyst. Previously, gold prices repeatedly pulled back at the $3,000 level, mainly relying on macro safe-haven buying, while the current entry of Asian buying has made the market structure more diverse and significantly enhanced its resilience.

Silver Benefits from Industrial Attributes, Rally More Sharp

Silver's performance this round has been better than gold's, benefiting from continuous industrial demand from photovoltaic and new energy vehicle industries, and the recovery of silver's financial attributes. London Metal Exchange (LME) silver inventories have decreased for five consecutive weeks, cumulatively reducing by more than 800 tons, reflecting tight physical supply.

In the domestic market, spot silver T+D prices were reported at 7,680 yuan/kg, also rising. Multiple institution research reports believe that the silver supply-demand gap in 2026 is expected to expand to 120 million ounces, and the silver price center is expected to further shift upward.

Macro Factors Align, But Be Alert to High-Level Volatility

From a macro perspective, Fed September rate cut expectations remain high, with federal funds rate futures showing a probability of over 68%, the dollar index remains weak around 103, and falling real interest rates are beneficial to non-interest-bearing assets. Additionally, geopolitical uncertainty has not dissipated, global central bank gold purchases continue, providing long-term support for precious metals.

However, the market also has hidden worries. Last week's US ISM manufacturing PMI was better than expected. If this Friday's non-farm employment data again exceeds expectations, it may weaken the rate cut logic and trigger a short-term pullback in gold and silver. Technically, gold faces strong resistance around $3,050, while silver needs to be alert to selling pressure at the $35 integer level.

Institutional Views: Medium-Term Bullish, Pullbacks Are Allocation Opportunities

Goldman Sachs' commodities team recently raised its Q4 2026 gold price target to $3,200/ounce, citing that global central bank gold purchases will continue to hit record highs, combined with the recovery of Asian retail demand. A chief analyst in the domestic non-ferrous metals sector believes that silver, as a key raw material for welding materials and photovoltaic silver paste in the new round of AI computing power infrastructure, may see demand growth exceeding supply, with the gold-silver ratio still having room to fall.

From a trading strategy perspective, it is recommended that investors focus on allocation opportunities after pullbacks, prioritizing physical gold, gold ETFs or precious metals mining stocks with cost advantages. At the same time, due to silver's higher volatility than gold, reasonable position control is needed to cope with short-term market sentiment changes.

Overall, Asian physical demand is reshaping the precious metals market structure. The $3,000 gold level has changed from resistance to support. If macro data aligns, gold and silver prices are expected to continue expanding upward in the midst of fluctuations.