Intensifying expectations of a less-hawkish US Fed bode well for international gold prices during the last month of 2022. While the SHAUPM in RMB rose 1% in December, the LBMA Gold Price AM in USD capped a 3% gain.
The divergence between the RMB and USD gold prices widened. The weakening US dollar and lowering yields helped pushed the LBMA Gold Price AM in USD 7.4% higher in November, the best month since July 2020.
Gold’s price divergence continued: the Shanghai Gold Price Benchmark PM (SHAUPM) in RMB rose by 1%, while the LBMA Gold Price AM in USD saw a 2% fall in October.
The Shanghai Gold Price Benchmark PM (SHAUPM) in RMB rose by 0.5% in August while the LBMA Gold Price AM in USD saw a 2.6% fall. The average Shanghai-London gold price spread climbed further in the month, driven by stronger demand
Gold prices fell in May. Primarily driven by negative momentum impacts as well as lower risk and uncertainty, the SHAUPM in RMB and the LBMA Gold Price AM in USD fell by 1.8% and 3.2% respectively in the month.
Due to fewer working days in the month and manufacturers’ active replenishing ahead of the Chinese New Year (CNY) holiday, gold withdrawals from the Shanghai Gold Exchange (SGE) in February fell m-o-m.
China’s gold consumption boomed during the CNY holiday. A lower local gold price and freed-up travel budgets – due to COVID outbreaks in different regions – might have spurred consumer interest in gold products, especially Heritage gold jewellery and tiger-themed items.
The LBMA Gold Price PM finished November slightly higher as declines towards the end of the month wiped off earlier rallies. While the LBMA Gold Price AM in USD – which we normally use when comparing to the Chinese local gold price ‒ increased by 0.1%, the SHAUPM in CNY saw a minor drop of 0.3%. The appreciating CNY against the dollar and a steadily rising equity market may have contributed to the underperformance of the RMB gold price.
After five consecutive monthly inflows, collective holdings in Chinese gold ETFs reached 74t (US$4bn, RMB27bn) at the end of October, the highest AUM on record in tonnage terms. We cover this and more in our monthly blog on China's gold market.
Gold prices fell in September. The LBMA Gold Price AM in USD and the Shanghai Gold Benchmark Price (PM) in CNY declined by 4.6% and 4.3% respectively last month. The rising interest rate, outflows from global gold ETFs, and a stronger dollar all contributed to gold price weaknesses in September.
China’s economy is facing challenges. Gold, with its unique relationship with the Chinese stock market and the independence from China’s economy, could be an effective tool for investors.
Explore China's gold market in August. We cover the Shanghai Gold Benchmark Price PM, wholesale physical gold demand, gold ETF inflows, impacts of the rise in COVID-19 cases and more.
While the possible outcomes of the three-child policy and various supporting measures remain uncertain, we believe there is a link between birth rates and gold consumption, and the details are worth analysing.
International gold prices fell steeply in June. The weakness in the gold price can be largely attributed to the more-hawkish-than-expected monetary-tightening signals from the US Federal Reserve’s meeting on 18 June. But the decline in the RMB gold price was narrower than that of the USD gold price, thanks to a 1.6% depreciation in the CNY against the dollar last month.
