WGC Predicted Demand Recovery in Chinese Gold Market

SEATTLE (Scrap Monster): The analysis of Chinese gold market by the World Gold Council (WGC) says that a demand recovery is imminent.

According to Ray Jia, Senior Analyst, China World Gold Council, the Shanghai Gold Price Benchmark PM in Shanghai Gold Price Benchmark PM declined during the month of May this year. Meantime, the Shanghai-London gold price spread turned positive, triggered by recovery in local demand for the yellow metal.

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The Chinese gold ETFs recorded outflows during the month. The total assets under management in Chinese gold ETFs recorded decline by 1.8t to 56.7t. The dip in gold ETF holdings indicate reduced local investor demand for safe-haven assets such as gold. Meantime, the wholesale physical gold demand exhibited signs of recovery.

The country imported 27t of gold in April this year. This was down significantly when compared with 111t imported during the same month a year before.

The WGC report noted that major Chinese cities are seen emerging from the COVID resurgence, with related restrictions nearly coming to an end. Moreover, the country has been rolling out various stimulus measures to support economic growth. A gradual recovery from Covid-19 restrictions coupled with stimulus measures are likely to result in improved Chinese gold consumption in the coming months.