SEATTLE (Scrap Monster): The most recent report by the World Gold Council (WGC) indicated that seasonality and disruptions on account of fresh Covid-19 outbreaks weighed on gold’s wholesale demand in China during the month of October this year.
According to Ray Jia, Senior Analyst, China World Gold Council, the monthly average local gold price premium continued to remain at elevated levels. The hopes of rising gold demand on account of traditional peak season, pushed the average gold price premium to around $36 per ounce.
Also, the Shanghai Gold Exchange (SGE) reported weaker-than-usual gold withdrawals in October. The withdrawals during the month totalled 98 tonnes during the month, significantly down by 81 tonnes over the previous month. When compared with the same month a year before, the October 2022 withdrawals stood 38 tonnes lower. The pandemic-related restrictions in several regions in the Guangdong province resulted in the year-on-year weakness, said the report.
The Chinese gold ETFs witnessed outflow of 6 tonnes during the month. The total holdings dipped to 52 tonnes by end-October this year, which is the lowest level recorded since March 2020.
Looking forward, the WGC noted that Covid-19-related uncertainty continues to remain as a primary risk factor that may likely impact Chinese gold demand in Q4 this year.
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