Gold secured its position just shy of $4,000 per ounce after China National Gold Group Corp. ($CNGG) revealed the abrupt end to its retail tax incentive, spotlighting “gold holds near $4,000” as traders reassess metals strategy. What’s driving gold’s resilience despite this surprising policy reversal?
Gold Price Steadies at $3,980 After China Cuts Retailer Tax Incentive
Spot gold prices hold firm at $3,980 per ounce as of November 3, 2025, according to Bloomberg data, following China’s decision to discontinue its longstanding 3% value-added tax waiver for licensed retailers. Trading volumes on the Shanghai Gold Exchange surged 27% week-over-week to 12,500 kg, as investors responded to the policy change announced late October. China National Gold Group Corp. ($CNGG), the country’s largest bullion retailer, confirmed the move in a regulatory filing on October 28, 2025, marking the first major revision since 2019. This tax adjustment, effective November 1, upends expectations, with bullion previously gaining 15.4% year-to-date amid persistent global uncertainty.
China’s Tax Policy Shift Fuels Gold Market Volatility Worldwide
China’s exit from the tax incentive reverberates across global markets, amplifying volatility in both Asian and Western gold trading. The country accounts for roughly 29% of global gold demand, based on data from the World Gold Council (Q2 2025). Analysts at Citi noted that Shanghai-London price spreads, already at a five-year high—averaging $80 per ounce in mid-October—may narrow as Chinese retail demand softens. Gold-backed ETF inflows in Europe rose by 9% in October (Refinitiv Lipper), hinting at international investors hedging against heightened Asian market risk. This move underscores Beijing’s broader effort to curb speculative buying and cool overheated demand in the precious metals sector.
Gold Investors Adjust Strategies Amid Price Resilience and Policy Change
Private and institutional gold investors are recalibrating allocation models as prices stay near record highs and policy signals shift. Short-term traders are closely monitoring intraday movements for arbitrage opportunities, while longer-term investors consider potential pullbacks to add exposure. With China accounting for a significant share of global jewelry demand, global retail sector ETFs and mining stocks such as Newmont Corporation ($NEM) and Barrick Gold ($GOLD) could face increased volatility. Gold mining equities have seen mixed performance this quarter. Additionally, some investors are shifting focus to alternative safe havens including U.S. Treasuries and select stablecoins, as outlined in recent financial news reports. The end of the tax break is expected to create short-term turbulence, but underlying macro drivers—such as sustained central bank buying—remain intact.
Market Analysts Expect Gold’s $4,000 Level to Face More Tests
Industry analysts observe that gold’s resilience near $4,000 per ounce reflects a cautious optimism fueled by ongoing geopolitical risk and persistently high global inflation. According to market strategists at UBS and HSBC (October 2025 outlooks), potential outflows from Chinese retail investors could be offset by increased central bank and institutional buying from other regions. The consensus suggests gold’s uptrend is vulnerable to policy and currency fluctuations in the months ahead, but remains supported by robust safe-haven appeal.
Gold Holds Near $4,000 Signals New Era for Global Metals Investors
The “gold holds near $4,000” milestone underlines shifting demand dynamics as China retools retail policy and global investors navigate heightened uncertainty. Going forward, investors should watch for price swings linked to policy updates, jewelry sector demand, and central bank reserves. Those tracking precious metals should remain nimble, with hedging strategies ready for additional volatility.
Tags: gold price, China gold tax, $CNGG, metals investing, global economy
