The China Gold Market Report 2020 – published at the end of July – provides a comprehensive review of China’s gold market in 2019. This report is a joint effort from the Shanghai Gold Exchange (SGE), Shanghai Futures Exchange (SFE), China Gold Association (CGA), the People’s Bank of China (PBoC) and the World Gold Council. While this report provides valuable insights into key aspects of China’s gold market, it also sheds light on the businesses handled by Chinese commercial banks last year.
In this post we’ll explore the drivers behind the changes in banks’ main retail gold businesses, with a more detailed analysis to follow in the near future.
The most dominant driving force in developing China’s gold market
Chinese commercial banks’ gold businesses have expanded rapidly since the PBoC lifted the ban on retail bullion trading at the end of 2003. The following year, their gold trading volumes at the SGE totaled 235t, accounting for 35% of the SGE’s total gold trading volumes. Fifteen years later, gold trading volumes reached 56,202t in 2019, representing 82% of the SGE’s annual total.