Chinese Gold Price Spread Got Squeezed in March

SEATTLE (Scrap Monster): The regional insights published by the World Gold Council (WGC) stated that spread between the local and international prices of gold in China got squeezed during the month of March this year. The local gold consumption remained subdued, as several major cities implemented lockdown measures, following fresh spike in Covid-19 cases in the country.

Meantime, the net holdings in Chinese gold exchange traded funds (ETFs) rose in March this year, mainly driven by fall in equity markets. The listing of three new gold funds in late-March too contributed to the rise in ETF holdings.

The retail gold demand in India continued to remain sluggish as buyers postponed gold purchases expecting a correction in prices. The wholesale purchases by retailers and manufacturers too remained muted during the month. The official gold imports by the country recorded month-on-month decline by 80%. The recycled gold supply shot up, triggered by higher gold prices. The discount on gold widened from around $15 per ounce at the end of February to almost $60 per ounce in March. The Indian gold ETFs recorded marginal inflows of 0.2 tonnes.

Also, the U.S. gold coin sales amounted to $427 million in March 2022, with the cumulative Q1 sales surpassing the milestone of $1 billion.

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