China Removes Incentives: Gold Plunges Below $4,000
Gold prices fell again below $4,000/oz after China ended a long-standing tax incentive for some retailers. Early in the Asian session, gold fell as much as 0.6% to around $3,978/oz. This new policy risks depressing demand in one of the world's largest precious metals markets.
Beijing has now banned some retailers from offsetting VAT when selling gold purchased from the Shanghai Gold Exchange (SGE) and Shanghai Futures Exchange, whether sold directly or after processing. The tax incentive now applies only to members of the SGE and futures exchanges, such as major banks, refiners, and manufacturers—and the policy will run until the end of 2027.
Gold hit a record high in early October due to global retail buying, only to fall sharply in the last two weeks of the month. However, prices are still up more than 50% year-to-date, supported by central bank buying and expected strong hedge-asset interest.
According to Adrian Ash of BullionVault, tax changes in the world's largest gold consumer could dampen global sentiment and open the door to a deeper correction after last month's surge. Meanwhile, the Bloomberg Dollar Spot Index remained virtually unchanged; silver also weakened, while platinum and palladium actually strengthened slightly. (asd)
Source: Newsmaker.id
