Gold supply squeeze: Asian producers hoard metal as Indonesia readies 15% export tax

Asia's gold miners have stopped shipping the value overseas. Laos is building its own refining industry around the Lao Bullion Bank. Indonesia, meanwhile, will start taxing gold exports at up to 15% in 2026. And China — the world's biggest producer — is both restricting outflows and buying at a record pace through its central bank. The shift, reported by Nikkei Asia this week, amounts to a slow-motion squeeze on the internationally traded gold market. London spot changed hands at $4,146 early Monday, almost 26% below the $5,589.38 record printed on January 28. The People's Bank of China just extended its buying streak to a 22nd straight month, adding 650,000 ounces in August — about 20.2 tons, its largest monthly haul since October 2023. At current prices, its 76.73 million-ounce stockpile is worth roughly $350 billion.

Indonesia's move is the most concrete. Finance ministry official Febrio Kacaribu told parliament last November that export duties of 7.5% to 15% would take effect sometime in 2026, with the heaviest rates on barely processed dore and the lightest on finished minted bars. The design is deliberate: Jakarta wants the refining margin kept at home rather than captured in Singapore or Switzerland. Windfall pricing makes the timing sharp — rates step up another 2.5 percentage points whenever gold trades at or above $3,200 an ounce, and with spot above $4,100, the maximum bracket is already in play. The country's gold exports hit $1.64 billion in the first nine months of 2025, already 49% above the full-year 2024 total of $1.1 billion. Apply a 15% levy to that run rate and the implied government take is roughly $250 million.

Laos is playing the longer game. The Lao Bullion Bank, launched on December 3, 2024, is the centerpiece of a push to refine domestically what was once exported as low-value ore. The World Gold Council puts the country's 2025 output at roughly 12 tons — sixth-largest in Asia — against estimated reserves of 500 to 1,000 tons. A new refinery with 150 tons of annual capacity is expected to reach full operations in November, and miners have been directed to refine to above 99% purity before exporting. Households already hold an estimated $10 billion in gold, which the bank is trying to draw into the formal system with deposit accounts paying 2% a year. The stated ambition: a regional precious-metals hub by 2030.

Africa is moving the same way. Madagascar and Ghana are among the producers tightening domestic control of their output.

Why it matters

For gold, this is a supply story that compounds quietly. Every ton refined and stockpiled at home is a ton that never reaches the London market, where refiners source the metal they deliver against paper contracts. Over time, that shrinks the free float available to absorb demand shocks — and the demand side is not shrinking. Central banks have been the steady bid since 2022, when Western sanctions froze roughly half of Russia's official reserves and set off a diversification rush. MKS PAMP strategist Nicky Shiels estimates the resulting "debasement and de-dollarization" premium at about $840 an ounce — up from roughly $120 before 2022. Near term, the September 16 Fed hike and a 10-year Treasury yield at its highest since 2002 are the counterweight, capping rallies as higher yields punish a non-yielding asset. The weak September payrolls print — 29,000 jobs against 90,000 expected — has since cooled bets on further hikes, which is why gold has steadied above $4,100 instead of breaking down.