Core Viewpoint - The Hong Kong gold stocks experienced a collective decline, influenced by a drop in spot gold prices and new tax policies announced by the Chinese government, which aim to regulate excessive speculation in the gold market [1]. Group 1: Market Performance - Chinese gold stocks such as China Gold International, Shandong Gold, and Zijin Mining saw declines exceeding 4%, 3%, and 3% respectively [1]. - Spot gold prices fell below $3970 per ounce, marking a decrease of 0.84% [1]. - The latest prices and percentage changes for various gold stocks are as follows: - China Gold International: $126.100, -4.03% - Shandong Gold: $31.600, -3.36% - China Silver Group: $0.610, -3.17% - Zijin Mining: $127.700, -2.82% [1]. Group 2: Regulatory Changes - The Ministry of Finance and the State Taxation Administration of China announced new tax policies regarding gold, effective from November 1, 2025, until December 31, 2027 [1]. - The new policies are designed to curb excessive speculation in gold trading and to better reflect market demand through tax leverage and investment usage explanations [1]. Group 3: Expert Commentary - Professor Gong Xiuguo from Sichuan University highlighted the risks associated with the influx of investors into the gold market amid global uncertainties and high gold prices [1]. - The new tax policies are expected to mitigate speculative trading and provide a more accurate representation of market demand [1].

Core Viewpoint - The announcement by the Ministry of Finance and the State Taxation Administration clarifies tax policies related to gold trading, aiming to enhance the regulation of the precious metals market and encourage compliance among industry participants [1][2]. Tax Policy Summary - From now until December 31, 2027, transactions of standard gold through the Shanghai Gold Exchange and Shanghai Futures Exchange will be exempt from value-added tax (VAT) for sellers [1]. - For investment purposes, VAT will be refunded immediately upon purchase, while for non-investment purposes, VAT will be exempt [2]. - Non-exchange sales of standard gold will still be subject to the current VAT rate of 13% [2]. Impact on Market Participants - The new policy is expected to lower costs for institutions and the jewelry industry that engage in compliant trading through exchanges, promoting legitimate market activities [2]. - The regulation is likely to deter illegal trading and short-term speculative behaviors, potentially affecting gold prices in the short term but benefiting legitimate industrial and investment demand in the long run [2]. Effects on Retail Investors - Retail investors purchasing investment gold bars from stores will incur a VAT of 13%, which is included in the price, making exchange trading more attractive due to tax benefits [3]. - The appeal of physical gold investments outside of exchange channels may diminish due to the tax implications [3]. Influence on Jewelry Consumption - The tax burden for consumers purchasing gold jewelry remains unchanged, as the tax policies for non-exchange gold sales have not altered [4]. - However, fluctuations in gold prices may still impact retail prices of gold jewelry [4].