WGC Recorded Elevated Chinese Local Gold Market Premium

SEATTLE (Scrap Monster): The World Gold Council (WGC) released its latest report on Chinese gold market during the month of November this year.

The gold withdrawal from the Shanghai Gold Exchange (SGE) totalled 132 tonnes during November 2023. This is 11 tonnes higher from the previous month and 16 tonnes higher than the same month a year before.

The local gold price premium held steady at elevated levels, indicating a relatively tight net gold supply.

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The Chinese gold ETFs recorded marginal net outflows of US$17 million in November. The collective ETF holdings declined to 59.4 tonnes, while the total assets under management (AUM) reported marginal decline by 1% to $3.9 billion. Also, the People’s Bank of China (PBoC) reported thirteenth straight month of gold purchases in November, with its total gold reserves climbing higher by 12 tonnes to 2,226 tonnes.

Looking ahead, the WGC expects the rising gold prices to trigger gold investments. On the other hand, it may dent jewellery demand due to budget constraints. The high gold prices could result in a boost in recycling activities.

WGC expects no material pickup in wholesale gold demand until January next year,due to anticipated restocking for Chinese New Year holiday in February. Meanwhile, investment demand is expected to remain strong.