Editor’s Note
This article reports on a sudden, sharp increase in the price of gold at China’s largest jewelry hub in Shenzhen, highlighting a significant market movement within a short timeframe.
On Monday afternoon, the price of gold in Shuibei, Shenzhen, the largest gold and jewelry distribution hub in China, suddenly experienced a sharp increase. Around 12:00, the price displayed on mini-programs was approximately 930 yuan per gram, but by 14:30, it had surged to 992 yuan per gram.
Last Saturday (November 1), the Ministry of Finance and the State Taxation Administration jointly issued the “Announcement on Tax Policies Related to Gold” (hereinafter referred to as the “New Policy”). The New Policy took effect on November 1, 2025, and will be implemented until December 31, 2027. The applicable timing is based on the date of physical delivery and outbound transfer.
The New Policy clarifies that before the end of 2027, for member units or clients trading standard gold through the Shanghai Gold Exchange (SGE) or the Shanghai Futures Exchange (SHFE), the selling member unit or client is exempt from Value-Added Tax (VAT) on the sale of standard gold. If no physical delivery and outbound transfer occurs, the exchange exempts VAT; if physical delivery and outbound transfer occurs, the corresponding VAT policy stipulated in the announcement applies.
Specifically:
– For member units purchasing standard gold for investment purposes, the exchange implements a VAT policy of “levy and immediate refund,” simultaneously exempts Urban Maintenance and Construction Tax and Education Surcharge, and issues a VAT special invoice to the purchasing member unit based on the actual transaction price.
– If purchased for non-investment purposes, VAT is exempted, and a regular invoice is issued to the purchasing member unit based on the actual transaction price.
– For clients purchasing standard gold, the exchange exempts VAT and issues a regular invoice to the purchasing client based on the actual transaction price.
Gu Fengda, Chief Analyst at Guosen Futures, pointed out:
Gu Fengda believes that after distinguishing between “investment” and “non-investment” purposes, the impact on different entities is structural.
– For gold-using enterprises, it is a clear positive, with stable expectations for reduced tax burdens.
– For traders, those focused on the physical industry chain will obtain a more favorable environment, while business models relying on “invoice chain” arbitrage for investment gold will become unsustainable, forcing a transition towards enhancing genuine service capabilities.
– For individual investors, the policy serves as a strong guide, encouraging them to shift from purchasing physical gold bars to investing in standardized financial products such as accumulated gold and gold ETFs through the SGE and SHFE. This aligns better with the direction of modern financial investment and is more convenient and secure.
Regarding the impact on gold prices, Gu Fengda’s judgment is: it may trigger structural differentiation in the short term, but in the long run, it does not alter the core trend dominated by global macroeconomic fundamentals. The retail price of investment gold bars may rise moderately due to cost transmission resulting from tax chain adjustments; meanwhile, the price of consumer-side gold, such as jewelry, will become more stable due to the clear reduction in tax burden.
The fluctuation in gold prices in Shenzhen’s Shuibei directly reflects changes in market supply-demand and costs.
The recent surge in Shuibei’s gold price is essentially the combined result of rising costs for non-exchange channels under the New Policy and the early realization of market expectations. The specific correlation pathways are as follows:
Before the New Policy’s implementation, the Shuibei market relied on “non-standardized transactions + tax grey areas” to form a price advantage of 100-200 yuan per gram lower than branded gold stores. The New Policy clarifies that non-exchange channels must pay the full 13% VAT, a cost directly transmitted to the transaction环节. To maintain profit margins, merchants are forced to raise selling prices, creating direct upward price pressure.
The New Policy forces transactions to concentrate towards compliant exchange channels. However, most Shuibei merchants are small and medium-sized operators who find it difficult to directly access exchange resources and thus cannot enjoy on-exchange tax benefits. To avoid higher future tax costs, many merchants increased their inventory before the New Policy took effect, leading to a short-term surge in market demand. Simultaneously, some downstream brand owners, concerned about future rising procurement costs, also locked in supplies in advance, further intensifying supply-demand tension in the Shuibei market and driving the price surge.
In addition to VAT costs, the New Policy strengthens regulatory requirements for non-exchange channels, including transaction record retention, large transaction reporting, and other anti-money laundering compliance obligations. The annual cost for a single monitoring system reaches 80,000 to 120,000 yuan. Small and medium-sized merchants need to factor these compliance costs into pricing, further pushing up terminal wholesale prices. This dual overlay of “tax burden costs + compliance costs” significantly weakens the original price advantage of the Shuibei market, making price increases an inevitable choice.
Gold prices have been strengthening continuously this year, with London spot gold rising over 52% year-to-date and domestic spot gold rising nearly 50% in sync. The market itself harbored strong expectations for price increases. The implementation of the New Policy further reinforced expectations of “rising costs + channel contraction.” Some merchants took the opportunity to adjust prices, while consumers’ psychology of “buying on the rise, not on the decline” also intensified short-term trading热度, forming a positive feedback loop for price increases.