- The LBMA Gold Price AM in US dollars (USD) fell by 4.7% and the Shanghai Gold Benchmark Price PM (SHAUPM) in renminbi (RMB) dropped 4% in the month1
- China’s retail consumption rebounded markedly y-o-y during the Chinese New Year (CNY) holiday2
- While Au(T+D)’s trading volumes tumbled, Chinese gold ETFs gained popularity during the month:
- Au(T+D)’s trading volumes totalled 581 tonnes (t), 148t lower m-o-m and 821t lower y-o-y mainly due to fewer trading days in February
- Chinese gold ETF holdings increased by 8t, reaching 68.6t, the highest ever
- Gold withdrawals from the Shanghai Gold Exchange (SGE) fell on a m-o-m basis due to seasonal reasons and fewer trading days in February
- The Shanghai-London gold price spread saw a sizable rise, averaging US$7.3/oz in the month, US$6.5/oz higher than in January3
- China’s wholesale gold demand could rise in March
- The People’s Bank of China gold reserves remained at 1,948t at the end of February, accounting for 3.5% of its total reserves. The Chinese central bank has kept its gold reserves unchanged since September 2019.
Gold prices fell in February
With economic indicators, such as US retail sales, and the COVID-19 vaccine roll-out pointing to recovery in key markets, expectations for the global economic recovery and higher inflation rose. This has led to rapidly climbing government bond yields in many markets, weighing on international gold prices as a result. Both the LBMA Gold Price AM in USD and the SHAUPM in RMB dropped last month.