Gold Holds Near $4,000 After China Ends Tax Break for Retailers

Group 1 - Gold prices held around $4,000 an ounce after a weak start, influenced by China's decision to end a long-standing tax rebate for some retailers, which may impact demand in the precious metals market [1][2] - The new policy allows companies producing non-investment gold to offset only 6% of the VAT, down from 13%, affecting both jewelry and industrial applications [3] - Jewelry stocks in China experienced significant declines, with Chow Tai Fook Jewellery Group Ltd. falling by as much as 12%, and Chow Sang Sang Holdings International Ltd. and Laopu Gold Co. also seeing drops of over 8% and 9% respectively [6] Group 2 - Despite a record surge in gold prices in October, prices have since dropped sharply, yet remain over 50% higher year-to-date, with ongoing demand from central banks and safe-haven investors expected to support prices [4] - Analysts predict that the tax changes will lead to price increases across the entire jewelry industry to manage cost pressures [6] - The overall sentiment in global gold markets may be negatively affected by the tax changes in China, the largest consumer of gold [5]