2020 has been a memorable year for China’s economy and its gold market. Combining their changes in the last month of 2020, we aim to paint a comprehensive picture of what happened in China’s gold market last year and identify possible drivers for the nation’s gold demand in 2021 based on our recently published Gold outlook 2021.
- The Shanghai Gold Benchmark Price PM had a strong year, yet it remained at a wide discount to the LBMA Gold Price AM when measured in the same currency
- China’s wholesale gold demand was weaker than 2019 despite improvements after Q1 amid the significant reduction in the spread of the COVID-19 pandemic and its economic recovery
- Au(T+D)’s average monthly trading volumes reached a record high last year
- China’s gold ETF market kept expanding, attracting an inflow of 16t in the year.
We expect gold demand in China to recover further in 2021 chiefly due to:
- China’s economic recovery – which is expected to continue as policy support remains in place
- Stimulation of consumer markets – a priority positioned by Chinese policy makers for the coming years.