China scraps gold tax perk!

China has decided to end a long-running tax break on gold, a move that could affect consumers in one of the world’s biggest bullion markets. From November 1, retailers will no longer be able to claim a value-added tax (VAT) deduction when selling gold purchased from the Shanghai Gold Exchange, whether sold directly or after processing, according to new rules issued by the Ministry of Finance.

The policy change applies to both investment-grade products—such as gold bars, ingots, and coins approved by the People’s Bank of China—and non-investment forms like jewelry and industrial materials. The step is expected to boost government revenue as China grapples with weak economic growth and a struggling property sector, though it will likely raise gold prices for local buyers.

Recently, a global surge in retail demand pushed gold to record highs near $4,000 per ounce before correcting sharply. The sell-off coincided with reduced ETF inflows and the end of India’s festive demand. Still, strong central bank buying, U.S. rate cuts, and persistent global uncertainties continue to support gold’s safe-haven appeal.