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.
Explore China's gold market in July - gold price, consumer demand, outlook 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.
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’.
