- Global expansionary monetary policies and bullish gold price momentum pushed both the LBMA Gold Price AM in US dollars and the Shanghai Gold Benchmark Price PM (SHAUPM) in renminbi (RMB) to historical highs in July1
- China’s economy continued to see signs of improvement in July and the government has positioned the stimulation of domestic demand as a strategic focus for China’s future economic development
- Au(T+D) and gold-backed ETFs’ popularity among Chinese investors grew further:
- Au(T+D)’s volumes in July reached the second-highest level ever
- Chinese gold-backed ETFs’ total asset under management (AUM) recorded another historical high in July
- Both the amount of gold withdrawn from the Shanghai Gold Exchange (SGE) and Au9999’s trading volumes stabilised in July
- The Chinese local gold price discount2 widened significantly last month and the main driver might be the changing monetary environment in China
- The People’s Bank of China (PBoC) kept its gold reserves unchanged at 1,948t in July, accounting for 3.7% of its total reserves.
Gold prices surged in July
An easing monetary environment globally and the bullish gold price momentum were main contributors for gold prices’ record-breaking performances in the month. The LBMA Gold Price AM in USD jumped by 11% whereas the SHAUPM rose 7.4% in the month as RMB continued to appreciate, both breaching record highs. And even though the heightened volatility in Chinese equity markets after mid-July attracted many gold investors, a 14% surge in the CSI300 stock index during the first half of July stole some thunder away from the local gold market.