WGC: Chinese Gold Demand to Face Significant Challenges

The Chinese gold ETF holdings added 2.4 tonnes during the month, thus lifting the total holding to 61.8 ton

SEATTLE (Scrap Monster): The latest report published by the World Gold Council (WGC) focuses on China’s gold market during the month of March this year.

According to the report, the gold imports by the country recorded month-on-month decline amidst weak wholesale gold demand and relatively lower Shanghai-London gold price spread. The gold withdrawals from the Shanghai Gold Exchange (SGE) recorded significant year-on-year decline in March. The Q1 wholesale gold demand was the second weakest in the past decade. Also, the local gold price premium witnessed sizable fall in March, noted WGC.

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The Chinese gold ETF holdings added 2.4 tonnes during the month, thus lifting the total holding to 61.8 tonnes. However, the March inflows were insufficient to prevent a net outflow of 13.3 tonnes during Q1 this year. The Shanghai Gold Price Benchmark PM (SHAUPM) in RMB and the LBMA Gold Price AM in USD edged higher by 1.5% and 1.1% respectively in March 2022.

In the short term, the Chinese gold demand may face significant challenges from the lockdown measures to prevent further spread of the pandemic in various Chinese cities along with their negative impact on household income, said Ray Jia, Senior Analyst, China World Gold Council.

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