GS Gold Macro buying w a physical kicker

Summary: Steady buying from both China and western macros during the 1h week which accelerated post Treasury buy-back, from Privo: “signal seems pretty clear: they are willing to use buybacks and issuance composition more actively to stabilize the long end. Call it quasi- Twist, Twist-lite, whatever… the label matters less than the reaction function. I actually think the more lasting implication may be for the dollar/gold than rates” We’re comfortable holding length due to dollar pressure (release valve from a more pro-active Treasury ?), gradual Central Bank re-engagement, and strong Chinese imports, whilst positioning isn’t stretched (yet). Franchise flow picked up significantly this week, combination of 3-6m digis and outright buying targeting between 4800 – 5500. We’re running 6/10 length; long vol, skew and delta.

Side-note: Forget that CB’s don’t buy silver, and China is a net exporter; we’ve seen what happens when gold gets too expensive (price related retail switching), which likely the explains the 3m $90/oz digi demand this week (attractive given low vol and high skew)

• China Spec: Significant buying noted on Shanghai, top 5 2-day move over the last 5 years – total Chinese length still 25% off the highs

• Central Banks: The data is (frustratingly) lagged but the trend appears to remain; Uk exports to China (PBOC proxy) averaged 37 MT pm in Q2 vs 15 MT pm in 2025, Turkey is slowly buying back what they sold during the early days of the conflict, swap adjusted holdings 809 MT vs a high of ~822 MT, and of the 55 Reserve Managers we track, only Russia is liquidating.

• China Physical: Imports dropped to 135 MT in July vs 173 MT in June and 1h26 monthly avg of 144 MT. Noteworthy that the sequential decline was due to lower FTZ imports (customs cleared imports largely unchanged). Total Chinese imports +444 MT (80% y/y YTD), which has more than offset lower (reported) CB + ETF flow.