China’s Critical Decision on Gold
A pivotal decision concerning gold has been made in China, a country that holds a substantial portion of the global gold market. The Chinese Ministry of Finance announced the cancellation of incentives applied to gold sales within the country, effective from November 1st. Consequently, it is anticipated that prices will rise rapidly due to the absence of incentives for all gold bought and sold on the Shanghai Gold Exchange. However, it is suggested that the demand in China may decrease due to the more expensive gold, which could potentially trigger a wave of decline.
The decision China has made regarding the purchase and sale of gold is of significant interest to gold investors.
China has ended its tax incentive policy related to gold. The termination of the gold incentive is believed to be due to the weakening real estate sector and slowing economic growth, with the aim of providing additional resources to public finance.
The markets are closely monitoring China's decision on gold.
Markets anticipate that this move by China, which could raise gold prices domestically, may also drive up gold prices globally. Should China's demand for gold persist, record-level gold prices could be seen again, due to both high purchases and excessive demand.
Will gold prices drop?
Some experts, on the other hand, suggest that China's tax decision related to gold could potentially drive down prices. According to these specialists, the escalating costs of gold might prompt investors to pivot towards alternative assets. Consequently, the lack of demand for gold would result in a decrease in prices. In the past, a surge in gold demand across various regions worldwide led to a market correction, causing gold prices to tumble. Following China's decision, a similar downward trend is likely on the horizon.
Experts' latest insights on gold!
James Stanley of Forex has once again emphasized that the gold ounce price, which has reached the level of 4,000 dollars, is still in a 'bull' (rising) market, and that an upswing is imminent.
However, a gold analysis conducted by FXStreet highlighted the possibility of short-term declines due to corrections.
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