China's Gold Market Sees Surging Prices and ETF Growth

Gold prices surged in August, but momentum eased in early September, according to recent market data. Both the LBMA Gold Price PM and Shanghai benchmark Gold Price PM (SHAUPM) saw notable gains in August.

The Chinese gold ETFs' total asset under management (AUM) and collective holdings continued to rise. In early September, inflows persisted, showing no signs of slowing down. This is despite the jewellery sector's ongoing weakness and cooling bullion demand.

Gold withdrawals from the Shanghai Gold Exchange fell unseasonally in August, indicating a decrease in gold buying. The People's Bank of China reported a 20t gold purchase in August, marking the highest since October 2023.