- Both the LBMA Gold Price AM in US dollars (USD) and the Shanghai Gold Benchmark Price PM (SHAUPM) in renminbi (RMB) fell marginally, mainly due to the rising real rates in key regions and profit-taking1
- China’s economy continued to recover although its supply side economic indicators rebounded at a much faster pace than demand
- While there was a notable m-o-m decline in Au(T+D)’s trading volumes, the Chinese gold-backed ETF market continued to expand
- The wholesale physical gold demand in China rose further: gold withdrawals from the Shanghai Gold Exchange (SGE) totalled 154t, jumping by 38% m-o-m and 43% y-o-y
- The Chinese local gold price discount narrowed as physical gold demand continued to recover and the divergence in opportunity costs of holding gold in China and other major markets contracted2
- The People’s Bank of China’s gold reserves remained at 1,948t, accounting for 3.6% of its total reserves.
Gold prices witnessed marginal declines in September
Rebounding real rates in major markets, such as the US and China, were the main contributor to the 2.2% and 1.9% declines in the SHAUPM (RMB) and the LBMA Gold Price AM (USD). Meanwhile, with gold prices surging so far this year, a technical pullback related to profit-taking followed, as is often the case.
Primarily driven by the continued improvement in the domestic economy and policy makers’ prudent attitude towards monetary easing, the RMB strengthened further during the month, leading to a larger decline in the RMB-denominated gold price than in the USD.