Gold Price Premium Surged to Hit Record Level in China: WGC
The Chinese gold price premiums surged to hit record highs over the past few weeks, said the latest report published by the World Gold Council (WGC). The recent spike in premiums were mainly on account of favourable domestic demand and supply conditions. A return to normalized premium levels could be possible only with easing of supply needs.
The local gold price premium rocketed to hit levels of $121 per ounce on 14th September. The monthly average of local premiums had touched a record of $41 per ounce in August this year. According to Ray Jia, Senior Analyst, China World Gold Council, the local gold price premiums in China normally ranges between $5 per ounce and $15 per ounce. The changes in premium are mainly impacted by net supply conditions. However, the month of August marked significant surge in premiums, thus resulting in significant deviation from its mean values.
The local gold demand in the country is expected to peak in Q4, which in turn may help to reduce premiums. However, industry experts warn that the record-level RMB gold prices may hurt local consumption of the yellow metal. The rising gold prices have badly impacted gold demand so far this year.
Source: https://www.scrapmonster.com/