- Last month, the RMB Shanghai Gold Benchmark PM (SHAUPM) increased 5.7% compared to the 3% rise in the USD LBMA Gold Price AM.1
- The coronavirus (COVID-19) outbreak supported demand for gold as a safe-haven asset as stocks and commodities fell sharply, leading to:
- Au(T+D)’s trading volumes of 70 tonnes (t) per day – the highest level since last September
- An increase of more than 3t – or 7% – in holdings of Chinese gold-backed exchange-traded funds (ETFs) during the month.
- Au9999’s trading volumes – usually seen as a proxy for physical gold demand – and gold withdrawals from the Shanghai Gold Exchange (SGE) both dropped significantly in February, whereas the Chinese local gold premium turned negative as physical gold demand faltered domestically due to COVID-19 and seasonality factors.2
- The People’s Bank of China (PBoC) kept its gold reserves unchanged at 1,948t in February.