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Chinese demand for gold still subdued – UBS

FXStreet (Edinburgh) - Strategists at UBS assessed the demand for the yellow metal in the Chinese economy.

Key Quotes

Gold demand in China remains lackluster in spite of the Shanghai Gold Exchange trading at a premium vs. global spot”.

“But while average SGE volumes so far this month are higher at 17 tonnes versus 16 tonnes in July, this is still below the year-to-date average of 18 tonnes”.

“Feedback from the ground continues to point to weak demand, and althoughthe gap between local and international prices is positive, it still is not wide enough to provide decent arbitrage opportunities”.

“Gold’s brief visit sub-$1,300 last week did not encourage much physical buying in China. The reality is that underlying demand is currently largely absent”.

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