- Following the plunge seen in early August, the Shanghai Gold Benchmark Price PM (SHAUPM) (RMB) and the LBMA Gold Price AM (USD) rebounded as investor expectations for the Federal Reserve to taper bond purchases change1
- Driven by a rebound in China’s wholesale physical gold demand, the local gold price spread climbed, averaging US$5.8/oz in August, US$4.1/oz higher m-o-m and on a par with the y-t-d average2
- Amid a resurgence of COVID-19 cases, China’s economic growth slowed in August
- Trading volumes of Au(T+D) on the Shanghai Gold Exchange (SGE) and gold futures on the Shanghai Futures Exchange (SHFE) amounted to 567t and 3,596t respectively in August, both higher m-o-m3
- Chinese gold ETFs continued to see inflows last month, bringing collective holdings to 70.4t (US$4.1bn, RMB25.3bn), an increase of 9.7t y-t-d4
- China’s wholesale physical gold demand rebounded in August as the gold consumption offseason comes to an end
- China’s gold imports in July were stable and above the 2019 level5
- While the approach of the traditional gold consumption peak season will likely be supportive for China’s physical gold demand, the recent spike in locally transmitted COVID-19 cases might pose challenges.
After plummeting in early August, gold prices rebounded. The LBMA Gold Price AM in USD and the SHAUPM in CNY dropped by 0.8% and 0.7% respectively in August. And changes in investor expectations for the US Federal Reserve’s monetary tightening have been the major factor driving the gold price lately. For more information, please read our Gold Market Commentary.