The World Gold Council published the latest information on the development of the Chinese gold market in March of this year on its Goldhub blog. The Middle Kingdom has developed into the leading gold market over the past 20 years as the largest gold producer but also the largest gold consumer.
The summary says:
- The Renminbi Shanghai Gold Benchmark PM continued to rise in March, albeit slightly, while the LBMA Gold Price AM in USD declined slightly.
- The Chinese economy showed signs of a possible recovery last month as the COVID-19 outbreak appeared to be contained.
- Investment demand for gold in China continued to rise, bringing the gold trading volume to a new all-time high in March and increasing the holdings of Chinese gold-backed ETFs by another 4.6 tons.
- The 99.99 gold trade – often seen as a measure of physical gold demand in general – and gold withdrawals on the Shanghai Gold Exchange (SGE) recovered noticeably in March as most Chinese companies resumed business.
- In March, significantly higher gold demand and disruptions in gold supply chains worldwide due to the increased outbreak of the corona virus, combined with the still weak Chinese consumer demand, led to the largest local price reduction for RMB gold prices to date.
- The Volksbank of China kept its gold reserves unchanged at 1,948 t in March, which corresponds to 3.3% of the total reserves.