China's Gold Market Crackdown: Prices Set to Plummet or Stabilize?

• China's central bank, PBOC, is implementing strict supervision over gold trading to curb speculation and stabilize the market.
• The new framework involves real-time monitoring of all gold transactions, strict compliance enforcement, and special surveillance on large investors.
• This move aims to prevent uncontrolled market movements due to record-high gold prices (nearly $4,600 per ounce) and reduce fraudulent trading risks.
• PBOC also links gold market stability to Yuan currency stability, promising liquidity measures like interest rate cuts or RRR reductions if needed.
• Experts predict initial instability but long-term market stability, though some discussions suggest gold prices could still target $5,000 per ounce.

Why It Matters: China's strict gold market surveillance aims to stabilize prices and protect its economy and currency from volatility.