The premium price that top consumers pay for gold According to economists, investors and consumers fleeing China’s intensifying trade conflict with the United States caused the country’s above-global benchmark spot prices to expand this week.
China retaliated to U.S. President Donald Trump’s decision to raise charges on Chinese goods to 145% by raising tariffs on U.S. imports to 125% in the most recent salvo.
After a brief decline earlier this week, benchmark prices for gold, which are determined in London, recovered to surpass $3,200 per ounce and reach a record high of $3,243.82 on Friday, thanks to rising demand in China. [GOL/]
Hugo Pascal, a precious metals trader at InProved, stated, “China has been bidding gold every single day this week, fuelled by tariff uncertainty and yuan depreciation, helping the metal to push to a new all-time high.”
According to his calculations, the premium for gold in Friday’s afternoon auction was 1.1% higher than the London benchmark, compared to 0.15% a week earlier, indicating strong demand for the metal despite record high prices on the Shanghai Gold Exchange.
As the yuan fell to a 19-month low against the currencies of its main trade partners this week and hit a 2007 low versus the dollar, Chinese investors are flooding into gold.
This year, institutional and retail investors from over the world have fled to the safety of gold because they are concerned about the harm that tariffs will do to economic growth. Tariffs also cause inflation and devalue financial assets.
Premiums on the physical gold market in China increased from $6–$13 per ounce to $24–$54 per ounce this week over the benchmark price. [AS/GOL]
Independent expert Ross Norman stated, “It is very uncommon for gold to see buying on price strength and it usually occurs when factors are not just favourable but compelling.”
The People’s Bank of China (PBOC), which has been purchasing bullion for five months running, is contributing to the country’s positive investment sentiment.
China recently increased institutional demand for gold by allowing some of its insurance funds to invest up to 1% of their assets in the metal.
MSN dot com is the source.
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