Fashion
Gold holds near $4,000 after China ends tax break for retailers
By
Bloomberg
Published
November 3, 2025
Gold held around $4,000 an ounce after a weak start on Monday, as China ended a long-standing tax rebate for some retailers in a change that could weigh on demand in one of the world’s largest precious-metals markets.
Bullion for immediate delivery traded little changed towards midday in London, after falling as much as 1% in early trade. Beijing announced Saturday that it would no longer allow some retailers to offset a value-added tax fully when selling gold they bought from the Shanghai Gold Exchange and Shanghai Futures Exchange. The news sent Chinese gold jewelry stocks tumbling.
Under the new policy, companies producing so-called non-investment gold, such as for jewelry or industrial applications like electronics, can offset only 6% of the VAT, down from 13% previously. Firms that are not members of the exchanges will be subject to the same change when they sell investment products including gold bars.
Gold surged to a record in October, pushed higher by a retail buying frenzy, but it has since dropped sharply. Prices are still up by more than 50% year-to-date, even after the pullback. Many of the fundamentals that fueled the rally, including central bank and haven demand, are expected to remain in place.
“The tax changes in gold’s heaviest consumer nation will dent global sentiment,” said Adrian Ash, director of research at BullionVault. But the rebound in London markets on Monday, following weakness during Asian hours, shows that bullish mood remains strong, he
“China’s new policy complicates gold’s new found holding pattern, potentially hurting its ability to stay above $4,000. It remains to be seen if official-sector demand can offer a solid-enough backstop to offset any drag from Chinese consumers.”
Among jewelry stocks, Chow Tai Fook Jewellery Group Ltd. fell as much as 12% in Hong Kong, Chow Sang Sang Holdings International Ltd. shed more than 8%, and Laopu Gold Co. dropped more than 9%. The tax change is “likely to see the entire industry raise prices to pass through the cost pressure,” Citigroup Inc. analysts including Tiffany Feng wrote in a note.
Spot gold was trading at around $4,004.86 an ounce as of 11:32 a.m. in London. Silver was also little changed, while platinum and palladium rose.
According to updated Eurosystem staff projections, headline inflation is expected to average 2.1 per cent in 2025, easing to 1.9 per cent in 2026 and 1.8 per cent in 2027, before returning to 2.0 per cent in 2028. Inflation excluding energy and food is forecast at 2.4 per cent in 2025, gradually declining to 2.0 per cent by 2028. Inflation for 2026 has been revised upward, mainly due to expectations that services inflation will fall more slowly than previously anticipated, the Governing Council of the ECB said in a press release.
European Central Bank has kept its key interest rates unchanged, maintaining confidence that inflation will stabilise at the 2 per cent target.
Updated projections show inflation easing gradually over the coming years, with a slight upward revision for 2026 due to persistent services prices.
Economic growth forecasts have been revised higher, supported by stronger domestic demand.
The ECB also revised its economic growth outlook higher compared with its September projections. Growth is now expected to reach 1.4 per cent in 2025, 1.2 per cent in 2026 and 1.4 per cent in 2027, with expansion projected to remain at 1.4 per cent in 2028. The improvement is driven largely by stronger domestic demand across the euro area.
The Council reiterated its commitment to ensuring that inflation stabilises sustainably at the 2 per cent target. It emphasised that future monetary policy decisions will remain data-dependent and assessed on a meeting-by-meeting basis, without pre-committing to any specific interest rate path.
Fibre2Fashion News Desk (KD)
Vera Bradley reported Q3 net revenues of $62.3 million, down from $70.5 million year over year.
Direct revenues fell 5.3 per cent, with comparable sales down 5.8 per cent, while indirect revenues dropped 30.2 per cent.
Gross margin declined to 42.1 per cent, impacted by inventory write-downs and higher duties, despite early progress from its Project Sunshine transformation.
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