China’s New Gold Tax Policy Triggers Surge: 10g Bars Cross ¥10,000 as Banks Pause Gold Programs

Gold Prices Leap Overnight

“In the blink of an eye, a 10-gram gold bar now costs over ¥10,000! It used to be around ¥9,000. Glad I stocked up earlier,” wrote one user on social media.

On November 1, China’s Ministry of Finance and State Taxation Administration officially implemented the new “Gold Taxation Policy”, refining value-added tax (VAT) rules for gold transactions:
➡️ Standard gold sold via exchanges is exempt from VAT.
➡️ Sales outside exchanges remain subject to VAT.

The market response was immediate. By November 3, Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB) both suspended parts of their gold accumulation programs. Several jewelry brands also removed investment gold bars from online platforms or raised prices.
On major e-commerce sites, 10g bars now commonly sell for over ¥10,000.

Analysts note that the policy does not alter gold’s intrinsic value — short-term price swings mainly reflect market adjustments to tax differentiation and liquidity tightening.

Policy in Detail: A Tax Shift for Investment Gold

According to the new regulation, members and clients trading standard gold through the Shanghai Gold Exchange or Shanghai Futures Exchange can enjoy VAT exemption on sales. For transactions involving physical delivery, the policy differentiates between investment and non-investment uses, applying appropriate tax rebates or exemptions.

Xue Hongyan, a researcher at Suzhou Commercial Bank, said the reform’s core is its refined tax treatment between investment and non-investment gold. Gold purchased via official exchanges enjoys tax-free status, while gold bought off-exchange carries a 13% VAT — a significant difference.

He added that the main impact falls on investment gold bars and standardized exchange products, while jewelry and commemorative coins face minimal effect.

Wang Hongying, President of the China (Hong Kong) Institute of Financial Derivatives, noted that the policy may raise costs for non-exchange manufacturers, indirectly pushing up retail prices. Jewelry prices, however, will remain stable since VAT is already included.

Shifting Investment Behavior

According to Zeng Gang, Director of the Shanghai Finance and Development Lab, the policy will reshape market behavior.
“Buying standard gold bars through official exchanges now enjoys clear tax benefits, giving them a cost advantage and likely attracting more investors,” he said.

Meanwhile, paper gold, ETFs, and account-based gold products remain largely unaffected, but the exchange-based products’ cost efficiency may divert investor funds.
“This differentiation will encourage clearer investment-consumption boundaries — investors become more rational, separating investment motives from personal spending.”

Market Reaction: Banks Pause, Retailers Withdraw

Shortly after the policy took effect, major banks adjusted operations.
On November 3, ICBC paused new “Ruyi Gold” accumulation accounts and physical redemption applications; CCB did the same with its “Easy Gold” plan. Although ICBC later resumed service that evening, the market mood was already stirred.

Consumers flooded social media with stories of rushing to buy investment bars, while multiple brands temporarily removed their gold bars from online listings, citing “in procurement, unavailable for purchase.”

By November 3, online listings showed 10g gold bars priced above ¥10,000.

Analysts: Short-Term Surge, Long-Term Stability

Xue Hongyan believes the recent price rise mainly reflects market sentiment and short-term supply-demand imbalance.
“The new tax incentives favor exchange channels, prompting early buying from investors worried about higher taxes elsewhere,” he explained. “Combined with high global gold prices and paused bank services, this created temporary market tension.”

As of November 3 evening, London spot gold traded at US$4,017.97/oz, up 0.38%.

“The new policy will concentrate the market in two directions — investment toward low-cost exchange channels, and consumption toward branded, compliant retailers,” Xue concluded. “Investors should use exchange products for cost efficiency, while jewelry buyers should time their purchases wisely to avoid emotional buying.”