Spot gold surged above $5,240 an ounce on January 28, printing an intraday high of $5,247.63 and settling around $5,243.61, up roughly 1.2% on the day. Silver also raced higher, reaching $115.04 per ounce, while Chinese retail prices for pure-gold jewellery climbed above 1,600 yuan per gram, reflecting both global price moves and robust domestic demand.
The immediate backdrop was a weaker dollar: the dollar index tumbled to a near four-year low on January 27 before recovering modestly to 96.11. Investors flagged mounting US political uncertainty — including President Trump’s renewed public criticism of Fed Chair Jerome Powell and his pledge to name a replacement — alongside cooling US consumer confidence, as drivers that are eroding confidence in dollar assets and supporting safe-haven precious metals.
The price spike has forced operational responses from asset managers and exchanges. Two China-listed LOF funds — SDIC Silver LOF and E Fund’s gold-themed LOF — announced suspensions of new subscriptions and regular investment plans from January 28, with SDIC also implementing a trading halt into the morning session to address elevated premiums. Those moves signal liquidity-management constraints in closed-end and listed open-ended structures when underlying physical or ETF markets become stressed.
Market infrastructure also tightened: the Chicago Mercantile Exchange raised outright margin parameters on selected silver, platinum and palladium contracts effective after the close on January 28, pushing some silver margins to about 11% of notional value. Analysts are divided: some, like Marko Kolanovic, warn the silver move is speculative and could unwind sharply, while domestic brokers point to looser liquidity expectations, geopolitical shifts and strategic ETF allocations as structural supports for higher precious-metal prices.
The combination of retail gold buying in China, ETF inflows and speculative flows has created a feedback loop that exchanges, fund managers and regulators are trying to damp. Margin increases and subscription suspensions are blunt instruments intended to reduce leverage and cool trading, but they also risk dislocating secondary market liquidity and amplifying intraday volatility if investors rush to exit positions.
For global investors, the episode represents more than a metals-market story: it highlights how political rhetoric, central-bank expectations and market structure interact to produce outsized moves. Key near-term variables to watch are US economic data that shape Fed rate expectations, any policy signalling or personnel shifts from Washington, ETF and LOF premium/discount dynamics, and further exchange-level margin or trading controls that could either stabilise or intensify price moves.