China’s gold prices have surged, commanding a record premium above international prices, compared to less than $6 over the past decade.

The Shanghai premium rose in June due to import limitations by the People’s Bank of China, but investors are buying dollar-denominated assets to protect value.

The rise in demand is attributed to China’s property crisis, loose monetary policy, and falling bond yields.

ETF inflows into China reached their highest level since July 2022, and the central bank has increased gold purchases for 10 months to diversify reserves.