China tax move rattles gold, prices set to jump
China eliminated its gold tax break starting this month, a policy shift expected to push retail bullion costs higher by 3 percent to 5 percent domestically and potentially influence international markets. The Ministry of Finance announced that merchants can no longer claim value-added tax exemptions on high-purity bars and coins purchased through the Shanghai Gold Exchange, whether sold immediately or after manufacturing into jewelry and industrial products.
Analysts attribute the policy change to Beijing’s efforts at generating additional revenue amid economic challenges. The decision affects India as the world’s second-biggest gold purchaser, where experts predict similar price increases could dampen jewelry demand and pressure retailers. Global futures and spot markets may experience upward movement as reduced Chinese consumption gets balanced by elevated international valuations.
Market observers anticipate prices will trade within established ranges this week as traders monitor a Supreme Court tariff hearing scheduled for on Tuesday and await manufacturing data from major economies. Additional focus centers on Chinese trade figures, growth statistics and American employment indicators that could shape near-term precious metal valuations.
