China’s Evolving Metals Market: An Update for Precious Metals Investors

Gold itself never changes, but the system around trading gold does. The global metals market has changed over the past year, with shifts in China’s regulatory environment and a new platinum exchange. Here’s what changed, and what it could mean for the price you pay for gold over the long run.

While gold itself doesn’t change, the infrastructure of how we trade it has evolved over thousands of years.

Many years ago, trades were made on paper. Then they went to computers. Today, hundreds of millions of dollars of precious metals trade in volume each and every day all over the world. Historically, the two biggest exchanges have been New York and London, but now there’s a new exchange that’s bringing liquidity and trading volume from China. If you are a trader, an investor, or even a precious metals enthusiast, these developments can affect the price you pay for gold over the long term.

New York and London Set the Price of Gold for a Century

For generations, the New York Mercantile Exchange (COMEX) and the London bullion market have set the daily price of gold, silver, and platinum. China is the world’s biggest buyer of precious metals, but the country’s demand has been met through imports, not through the exchanges where prices are set. China moved into a new phase in the later months of 2025.

China Launched a Platinum Futures Exchange on November 27, 2025

Platinum and palladium futures started trading on China’s Guangzhou Futures Exchange, and this Guangzhou trade was a significant innovation because it allows delivery in sponge, the granular form of platinum used by autos and industrial purchasers for catalytic converters. This contrasts with most other contracts, which are for bars and ingots.

We mentioned this launch in our November, 2025 monthly recap at the time, as it had a direct impact on the price of platinum:

• China is the world’s largest user of platinum and until this exchange opened, China had no direct voice in fixing the platinum price.
• Platinum trade on the Shanghai Gold Exchange is around 4 tonnes a week. NYMEX sees around 200 tonnes of platinum transactions a week.
• Guangzhou adjusted its trading restrictions on platinum and palladium within weeks of launch as volume increased.

“The Guangzhou exchange, which is open to international participation, means that China’s future demand expectations can start to be factored into the price discovery process,” said Edward Sterck of the World Platinum Investment Council to Mining Weekly.

World Platinum Investment Council

Higher Trading Volume Means Tighter Prices

The price of gold is made up of millions of bids and asks. The more individuals buy and sell gold, the closer the price gets to the cent or even a fraction of a penny. A new exchange draws more buyers and sellers into the market, and that may help in certain respects. Bid-ask spreads tighten as the amount of trading expands, in platinum and in any metal that acquires a new pool of traders.

China Changed the Rules for Trading Paper Gold

On November 1, 2025, China’s finance ministry made a significant change to how gold is taxed. Here’s what happened, step by step.

How it worked before. Gold bought and sold directly on the Shanghai Gold Exchange is tax-free. But only approved members, mainly big banks and refiners, can trade there directly. Smaller shops and regional banks buy their gold from those members, and under the old rules they got a tax credit worth 13% that canceled out most of the sales tax they owed.

What changed. The new rules cut that credit from 13% down to 6% for sellers who aren’t exchange members. They now owe more tax on the gold they resell.

What it means practically. Those smaller sellers raised prices to cover the higher tax. Within days, gold bars at some regional banks and independent shops cost noticeably more than the identical gold bought straight from the exchange.

Why it matters long term. When buying as an exchange member is cheaper than buying from an outside shop, buyers start going straight to the big banks and refiners. China is the world’s largest gold market, so a tax change that shifts who buys from whom can, over time, change where gold flows and who influences its price.

China to Allow Foreign Traders onto Shanghai Nickel Market in April 2026

The Shanghai Futures Exchange opened its nickel contract to overseas traders for the first time in April 2026. Nickel volumes in Shanghai increased in the first half of 2026, with surplus nickel beginning to build in Chinese warehouses. The metals world is “drifting away from a single global benchmark,” and the major exchanges “appear to be benefiting equally from an expanding pie as more participants trade more metal in more parts of the world,” Reuters columnist Andy Home wrote. The London Metal Exchange posted a record trading year in 2025 while Shanghai grew.

China’s Central Bank Buys Gold for 21 Months in a Row

The People’s Bank of China has been buying gold for 21 months in a row through July 2026, the longest streak on record, according to the World Gold Council. China said it held 2,366 tonnes, or around 8% of its reserves. China’s gold imports in the first half of 2026 jumped 138% over a year earlier.

Implications for Today’s Investors

Here at CMI, we want everyone to understand how the global precious metals supply chain works together, whether you are looking to buy gold or sell gold. New exchanges and major regulatory changes may create short-term volatility. But over time, higher trading volume can create tighter, faster prices. It’s easy to think the price of gold is just some abstract thing, but it’s actually crucial to grasp how New York, London, and China flow together, so that you’re ready the next time these markets make the news.

You can check our daily spot prices, check on our gold and silver coins, or talk to one of our non-commission brokers about owning the metal itself.

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