- The Shanghai Gold Benchmark price saw a modest decline in September, with the local gold premium falling sharply due to the stabilising currency and increasing gold imports.
- Led by the declining gold price and the soft physical demand, both Au(T+D) and Au9999’s trading volume dropped last month while loadouts from the Shanghai Gold Exchange (SGE) levelled off.
- After hitting the lowest level since 2017 in July, gold imports to China rebounded in August.
- The People’s Bank of China (PBoC) added another 6t to its gold reserves in September. After ten consecutive purchases, the PBoC now holds 1,948t gold in its reserves.
Chinese gold prices saw modest declines in September. The Shanghai Gold Benchmark (PM) and Au(T+D)’s prices fell by 3.26% and 3.12% respectively in September. LBMA Gold fixing AM also witnessed a 2.35% drop. The primary reasons for this weakness include easing trade dispute concerns, rebounds in US treasury yields and the strong US dollar.
With domestic gold supplies rising and speculative enthusiasm falling – which we will discuss below, Chinese local gold prices experienced extra headwinds, resulting in weaker performances compared with international gold price.