Gold Focus: Items tagged with "china gold market"
China’s gold market in October: higher jewellery retail sales, seasonally lower wholesale gold demand
Gold prices saw marginal declines in October. Even though the US presidential election and a significant rebound in COVID-19 infection cases in many regions kept uncertainty elevated globally, climbing real interest rates in key markets such as the US and China weighed on local gold prices. As a result, the SHAUPM (RMB) and LBMA Gold Price AM (USD) fell by 1.8% and 0.4% respectively in the month.
Gold demand in China, in particular, investment demand, has benefited from rising concerns for the economy as well as the lowered opportunity cost amid the COVID-19 outbreak and the central bank’s response to it. But with signs of a potential economic recovery emerging, can we expect gold’s attractiveness as a safe haven in China to fade? We believe that the answer is ‘No’.
Recent indications suggest that the coronavirus (COVID-19) outbreak in China appears to be virtually contained. Even though there are still new imported infection cases, China’s reported local infections have remained near zero for a significant period.
On 25th January 2020, people throughout China will celebrate the start of a new year – the most important festival in the Chinese lunar calendar. This will kick off Year of the Rat and begin another rotation of the twelve zodiac signs. Most people are already in a festive mood, and, as a result, so is China’s gold market.
- Chinese gold prices rose modestly in July
- Au(T+D)’s trading volume in July extended its June surge
- The local gold premium saw a much lower volatility
- Imports registered another decline, dropping to 55t in July
- Gold withdrawals from Shanghai Gold Exchange (SGE) experienced the first rise in four months
- The People’s Bank of China (PBoC) added another 10t to its gold reserves
Madame Wu Xiaoling, Chairwoman of the Board of the PBC School of Finance, Tsinghua University and former Deputy Governor of the People’s Bank of China, believes that gold has a crucial role to play in China’s continuing development and the internationalisation of the RMB.
Recycled gold is an important source of gold supply . In 2018, the volume of recycled gold reached 1,168t, accounting for over 25% of total supply globally. Recycled gold is also an important source of supply in China, amounting to 146t, or 20% of domestic supply in 2018. Recently, China’s recycled gold market has experienced some exciting developments which could improve the efficiency and transparency of the industry.
- Shanghai Gold Benchmark price hit 319.2 yuan/gram – highest level since its introduction in April 2016
- Au(T+D)’s trading volume in June reached second highest level on record – 2,062t
- The local gold premium rose sharply
- Imports continued to slide in May, dropping to 69t
- Gold withdrawals from Shanghai Gold Exchange (SGE) fell again last month
- PBOC added a further 10t to its reserves in June