Core Viewpoint - The newly implemented gold tax policy is increasing tax costs for downstream enterprises in the gold jewelry industry, leading to a short-term squeeze on profit margins. Companies are passing on cost pressures to consumers through price increases, while the industry anticipates a shift towards more centralized trading and greater transparency in the market [1][2][3]. Tax Policy Impact - The new tax policy, effective from November 1, 2025, distinguishes between investment and non-investment uses of gold, resulting in increased tax burdens for non-investment purposes. This change is expected to reshape the industry and enhance regulatory compliance [2][3][9]. - The tax burden for non-investment gold enterprises has increased, with input tax deductions reduced from 13% to 6%, effectively raising gold procurement costs by approximately 7% [3][5]. Market Reaction - Following the announcement of the tax policy, the market has seen a significant decline in trading activity, with many businesses adopting a wait-and-see approach until further operational details are clarified [2][6]. - Retail prices for gold jewelry have increased, with reports indicating a rise of 60 to 70 yuan per gram in various stores, reflecting the industry's response to the new tax burdens [7][8]. Industry Restructuring - The new tax regulations are expected to lead to a restructuring of the industry, with smaller businesses facing increased operational costs and potential exit from the market, while larger, established brands may maintain their competitive edge [6][8]. - Analysts predict that the tax changes will accelerate the consolidation of the industry, as smaller players struggle to compete with larger firms that can absorb the increased costs [7][8]. Shift to Centralized Trading - The tax policy is likely to drive a shift towards centralized trading platforms, as the tax advantages for transactions conducted through exchanges will encourage more participants to engage in formal trading [9][10]. - The new regulations aim to reduce illegal trading and speculative behavior by making the tax implications clearer and more stringent for non-compliant transactions [10][11].