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The Chinese gold premium: has the dust settled on the record surge?
China’s local gold price premium has rocketed to previously unseen levels, reaching US$121/oz on 14 September (Chart 1). And August’s US$41/oz monthly average already marked a record since the Shanghai Gold Exchange’s establishment in 2002. As we noted in a previous report, China’s local gold price, after adjusting for exchange rate differences, is normally higher than its international peer. This can be explained by the fact that prior to the pandemic, over 60% of China’s gold supply came from imports, as domestic production simply could not meet demand.1 And due to import controls, gold has become a ... (full story)