999.46 in Shanghai: three counters priced the same night three different ways

§1Fifty-four fen short.

Shanghai's benchmark gold contract stopped 54 fen short of a round number. The Shanghai Gold Exchange's Au(T+D) was quoted at 999.46 yuan a gram on 22 August, up 20.19 yuan or 2.06% against a previous close of 979.27, which leaves it 0.54 yuan under 1,000. Eight days earlier this paper printed the same contract at 940.44 yuan, so the exchange leg has added 59.02 yuan, or 6.28%, inside eight sessions. The move behind it happened offshore and overnight. Chinese reports put international spot above $4,600 an ounce in Friday's night session with an intraday high near $4,630, which Eastmoney and Sina both describe as a three-month high, and Eastmoney puts August's cumulative gain near 13%. This paper's tape carries Friday's last New York print from Kitco at $4,602.40 an ounce, re-read at press time on Sunday and unchanged, because no session has opened since.

The counters did not follow in step. On the same day Lao Miao Gold moved its pure gold jewellery board to 1,391 yuan a gram, up 34; Lao Feng Xiang to 1,388, up 32; and Chow Sang Sang to 1,387, up 22, on figures reported by the 21st Century Business Herald and carried by Eastmoney. Measured against each brand's own previous board those are rises of 2.51%, 2.36% and 1.61% on this desk's arithmetic. Two of the three beat the exchange's 2.06% and one trailed it, which is the useful part: the retail board is not one price reacting to one input, it is three merchandising decisions taken overnight on the same metal. Chow Sang Sang held the highest of the three boards on Friday at 1,365 and holds the lowest of the three on Saturday.

§2Three boards, three decisions.

The premium says it more precisely. Chow Sang Sang's counter stood 39.39% over the exchange price on Friday, on this desk's arithmetic against the 979.27 close, and 38.77% on Saturday against 999.46, a fall of 0.61 of a point. In yuan the gap widened over the same day, from 385.73 to 387.54, because a smaller percentage of a larger base is still a larger number. Both readings are correct and they answer different questions. The yuan gap is what a buyer pays over metal; the ratio is whether the shop is keeping pace with the metal, and it is not. This paper marked the same relationship at 39.5% on 14 August, on Chow Tai Fook against Au99.99 rather than Chow Sang Sang against Au(T+D), so that is a direction rather than a like-for-like step.

§3The trap in the Saturday tables.

There is a dating trap in the Saturday tables, and it is worth naming because it would corrupt exactly this arithmetic. The Chinese price roundups datestamped 22 August at 07:00 carry the exchange's Saturday quotation beside a counter board reading 1,365 for Chow Sang Sang, 1,363 for Chow Tai Fook and 1,356 for Lao Feng Xiang. Those are Friday's counter figures. Lao Feng Xiang at 1,388 up 32 back-solves to 1,356, Chow Sang Sang at 1,387 up 22 back-solves to 1,365, and 1,365 is the number this paper itself printed on Friday. Sina, publishing on 23 August, dates the Chow Sang Sang and Chow Tai Fook figures to 21 August directly, though it puts Lao Feng Xiang four yuan lower at 1,352 than the back-solve does, a divergence this desk cannot resolve and does not rely on. Anyone reading a markup off a 07:00 table is measuring across two sessions and will print the premium too low.