Precious metal traders: The rising tax costs may further exacerbate the short-term selling pressure from speculative funds.

Jin10 data reported on November 3 that it is noteworthy that the introduction of this policy coincides with an intensification of the Bull vs Bear Battle in the gold market. “The rise in tax costs may further exacerbate the short-term selling pressure from speculative funds,” mentioned a precious metals trader. Some investors who had previously hoarded in anticipation of a price rise may choose to cash out early, while new entrants may reduce leverage due to tax concerns, potentially leading to tightened market liquidity in the short term. “Assuming you buy 1 million yuan worth of gold bars and hold them for a while before selling, if the gold price rises by less than 13%, you will actually incur a loss after deducting taxes and fees,” the trader cautioned. Short-term speculators need to be cautious, while long-term holdings or using tools like gold ETFs can help to mitigate some tax burdens. For consumers of gold jewelry, there is almost no impact on daily purchases, but the premium on 'pseudo-investment gold' may narrow. Furthermore, the policy does not restrict gold investment but rather standardizes the path. In the long run, it will help to deflate market bubbles. Funds will be more inclined to allocate towards highly liquid standard gold or gold ETFs, rather than high-premium non-investment products.