Shanghai flips to first gold premium in 2 months

Gold and Silver pricesrallied on 20 December from close to 5-week and 14-week lows respectively in London, reducing this week’s steep post-Fed losses as weaker-than-expected US inflation data followed an upturn in wholesale bullion demand in No.1 consumer nation China. With less than 6 weeks until Chinese New Year – now the world’s heaviest gold-buying festival, overtaking Diwali in India – Shanghai gold prices flipped to a premium above London quotes for the first time in 2 months, offering new imports of bullion an incentive of $4.70 per Troy ounce.

Although barely half the Shanghai gold premium’s long-term average, Friday’s figure contrasts with an average Chinese discount equal to almost $14 per ounce so far this calendar quarter, as China’s private sector gold demand weakened further in the face of new record gold prices, now averaging $2666 per ounce since the start of October.  29 January 2025 will mark the start of the Year of the Snake, last celebrated in 2013, when gold prices sank by 27.3%, the worst plunge in over 3 decades.