Gold Price Discovery: Moving from West to East?

Has price discovery in the gold market moved East? Our view is that this isn’t totally the case yet, but that we are starting to see evidence of a point where the East (i.e. Shanghai market) has enough weight to dictate the price of gold alongside more traditional drivers (such as US rates and yields) . Despite W estern outflows of gold from physically backed ETF s due to a high interest rate environment, gold prices have hit record highs. We attribute this to the Shanghai market evolving from the market of last resort (as was the case in 2013) to a significant price driver, due to a combination of central bank demand, consumer demand and on - exchange trades.