In July, domestic quotes of precious metal decreased. The following factors contributed to this: a decrease in momentum, an outflow of shares from world gold exchange-traded funds, a decrease in inflation expectations and a strong dollar. As in previous months, the depreciation of the yuan increased the rate of precious metal compared to the dollar indicator.
Wholesale demand for physical gold continues to grow
Domestic producers and banks seized 161 tons of gold from the Shanghai Gold Exchange in July, up 15% from June and 45% higher compared to the same period last year. The decline in the domestic gold exchange rate led to an improvement in the situation with wholesale and retail demand for precious metal. The successful containment of the coronavirus pandemic and the improvement of the economic situation in China also contributed to the growing popularity of precious metal.
Producers made up for gold reserves amid shutdowns, and an improved forecast of gold consumption and a low precious metal rate were the main factors that led to an increase in the volume of gold withdrawal from the Shanghai Gold Exchange in July.