Shanghai Gold Exchange in gold trading

The Shanghai Gold Exchange (SGE) is China’s state-sanctioned exchange for physical gold and other precious metals, established in 2002. It trades spot and deferred contracts in yuan per gram and publishes the Shanghai Gold Benchmark Price twice daily. Withdrawals of physical gold from SGE vaults are watched as a proxy for Chinese wholesale demand.

How it applies to gold trading

China is one of the largest consumers of gold, so SGE prices matter for global sentiment. The key indicator is the Shanghai premium: the gap between the SGE price and the London price converted into yuan per gram. A large premium suggests strong local demand or import constraints; a discount suggests weak demand. Analysts watch it alongside import data and central bank purchases.

SGE trading hours cover the Asian day and a night session, so Chinese buying or selling can drive gold’s Asian session moves.

Worked example

Example (hypothetical numbers): London spot is $4,000 an ounce and USDCNY is 7.20, so the converted price is 4,000 × 7.20 ÷ 31.1035 = about 926 yuan per gram. If the SGE trades at 941 yuan per gram, the Shanghai premium is about 15 yuan per gram, or roughly $65 an ounce, signaling strong local demand.

A common mistake

Comparing the SGE price with XAUUSD directly without converting units and currency.

See also: Central bank buying, LBMA, Asian range, Gram and 10-gram pricing.

Frequently asked questions