China Gold Market Update: November Demand Feels The VAT Reform
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World Gold Council1.07K FollowersFollow5ShareSavePlay(7min)CommentsSummaryWholesale gold demand fell 32% m/m to 84t in November amid weakness in the gold jewellery sector.Chinese gold ETFs continued to see sizable inflows, attracting RMB16bn; gold futures volumes at the Shanghai Futures Exchange fell alongside the falling gold price volatility.The recent VAT reform has accelerated consolidation in the gold jewellery industry, hampering consumption and, in all probability, continuing to hurt sales in the near future.Investment momentum has been notable over recent months, and previous drivers, including changes in local equity performance, geopolitical tensions and the gold price, will continue to be key. e-crow/iStock via Getty Images Highlights Gold rose further: The LBMA Gold Price PM in USD saw its sixth monthly gain, while the Shanghai Benchmark Gold Price PM (SHAUPM) in RMB rose for the fifth consecutive month Wholesale gold demand This article was written byWorld Gold Council1.07K FollowersFollowThe World Gold Council is the market development organization for the gold industry. Our purpose is to stimulate and sustain demand for gold, provide industry leadership, and be the global authority on the gold market. We are a unique organization that delivers tangible benefits to the gold industry. We are an active force within the market, working with a large and diverse set of partners to create access, drive innovation and stimulate demand, while providing a collective voice for our members. We provide insights into the international gold markets, helping people to understand the investment qualities of gold and its role in meeting the social and environmental needs of society. For more information visit www.gold.org.Quick InsightsHow has China's VAT reform impacted wholesale gold demand and sector dynamics?VAT reform accelerated industry consolidation, weakened jewellery demand, and shifted investment-oriented buyers toward bullion and ETFs, likely continuing to suppress jewellery sales near-term.What trends are evident in Chinese gold ETF flows and what is driving them?Chinese gold ETFs attracted RMB16bn in November, driven by safe-haven demand, local equity pullbacks, and migration of investment-motivated buyers from jewellery to ETFs.How is the PBoC's gold accumulation affecting China's reserve composition?The PBoC's 13-month gold buying streak lifted reserves to 2,305t, increasing gold's share of foreign exchange reserves from 5.5% to 8.3% year-to-date.Recommended For You