China’s gold price is rising against levels in London, a trend that local traders say is due to government curbs on imports of the precious metal.
The Shanghai spot price was more than $40 an ounce higher than that in London on Aug. 14, according to Bloomberg calculations based on exchange data.
That’s the biggest premium in more than five months, with the gap steadily widening from late June even as consumer demand in China remained sluggish.
The government has reduced or stopped issuing import quotas to some local banks. That’s resulted in a drop in flows over the last few months, and there’s no immediate prospect of the affected quotas being issued again.
Authorities moving to limit gold imports appears to be a major driver behind the growing gap, according to traders and importers.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished