- Shanghai Gold Benchmark price hit 319.2 yuan/gram – highest level since its introduction in April 2016
- Au(T+D)’s trading volume in June reached second highest level on record – 2,062t
- The local gold premium rose sharply
- Imports continued to slide in May, dropping to 69t
- Gold withdrawals from Shanghai Gold Exchange (SGE) fell again last month
- PBOC added a further 10t to its reserves in June
Gold was already on fire at the beginning of summer: Au(T+D) soared 8.7% in June and the Shanghai Gold Benchmark price (PM) peaked at 319.2 yuan/gram – the highest level since its introduction in April 2016.1 And this happened even though CNY and Chinese stock markets were relatively stable. The main drivers of this rally included expectations for easing monetary policies globally, to combat a potential recession, and geopolitical tensions in the Middle East.
Also, the Chinese economy continued to show signs of slowdown with manufacturing/service/composite PMIs and the growth rate of PPI all registered further declines in June. Economic concerns have played a big part in the rise of safe-haven demand for gold in China.
Driven by above-mentioned factors and momentum, gold’s speculative interest in China surged. The trading volume of Au(T+D), the margin-traded and the most liquid gold contract at Shanghai Gold Exchange, reached 2,062t in June, the second highest level in its history.