China is scrapping a long-standing gold tax incentive in a potential setback for consumers in one of the world’s top bullion markets.

Starting on November 1, Beijing will no longer allow retailers to offset a value-added tax when selling gold they bought from the Shanghai Gold Exchange, whether sold directly or after processing, according a new legislation from the Ministry of Finance.

The move should bolster government revenue at a time when a sluggish property market and weak economic growth have strained public coffers. But the changes will also likely increase the cost of buying gold for Chinese consumers.

A buying frenzy among retail investors around the world recently helped gold’s record-breaking rally move to overbought territory, setting the precious metal up for an abrupt corr

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