Monday May 22, 2017 08:46
As the largest buyer of physical gold, China’s influence on global price discovery seems likely to increase, says Citi. Shanghai still holds a prominent position as the largest gold futures market outside of the U.S., despite a reduction in Shanghai Futures Exchange volume for the year to date to around 450 million ounces, Citi says. By comparison, New-York based Comex gold volume has grown 15% year-on-year to around 2.1 billion ounces. “Hence, while market participants continue to reference the LBMA 3 p.m. close and spot gold prices (both in $/oz), Shanghai prices (RMB/g) should eventually play an increasingly important role,” Citi says. Analysts later add, “we could see London 10 a.m. prices, in particular, derive more market sentiment from China over the mid-term.”
By Allen Sykora of Kitco News
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