Gold prices showed resilience to start the week, stabilizing near the $4,000 per ounce mark even as China implemented policy shifts that could curb demand in its massive market. Spot gold edged up 0.1% following an initial dip of up to 1%, demonstrating the metal’s ability to weather external pressures amid ongoing global uncertainties.
Prices continuing hovering around $4,000 per ounce, far above where it started 2025 at under $2,700. Bulls continue to see $5,000 as a viable target for 2026.
The move from Beijing involves scrapping a value-added tax rebate for certain retailers sourcing gold from the Shanghai Gold Exchange and Shanghai Futures Exchange. This adjustment, effective through 2027, reduces the tax offset from 13% to 6% for non-investment products like jewelry, potentially leading to higher consumer prices and softer retail activity.
Chinese jewelry companies felt the impact immediately, with shares of Chow Tai Fook Jewellery Group Ltd. plunging as much as 12%, Chow Sang Sang Holdings International Ltd. down over 8%, and Laopu Gold Co. dropping more than 9%.
Analysts at Citigroup noted that the change is “likely to see the entire industry raise prices to pass through the cost pressure.”
Adrian Ash, director of research at BullionVault, added: “While Chinese gold demand has played little part in this year’s record bull market, the tax changes in gold’s heaviest consumer nation will dent global sentiment.”
He further observed: “This news could prove very welcome to traders and investors hoping for a deeper correction after last month’s spike.”
Despite these headwinds, gold’s broader appeal remains strong for American investors seeking a hedge against inflation and economic volatility. The metal has climbed more than 50% year-to-date, fueled by central bank purchases and safe-haven buying, even after retreating from its October peak. In an era of rising national debt and geopolitical tensions, holding physical gold or related assets continues to align with sound, patriotic financial strategies that prioritize long-term stability over short-term speculation.
Market watchers will keep an eye on whether this policy ripple from China prompts any lasting shifts, but for now, gold’s steadiness reinforces its role as a cornerstone in diversified portfolios geared toward preserving American wealth.
