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Less buying and dull sentiment dim gold demand
By Hu Xiaocen |
November 16, 2012, Friday
|
Print Edition
Print Edition
CHINA'S demand for gold dimmed in the third quarter amid a reduction in jewelry buying and negative investment sentiment, and helped pulled down the global demand by 12 percent from a record a year earlier, the World Gold Council said.
The Chinese demand for the bullion shed 8 percent annually to 185.1 tons in the third quarter as jewelry purchases were cut by 6 percent and investment fell 12 percent, the WGC said in its quarterly outlook yesterday.
"The slowing of China's economy had a negative impact on consumer sentiment, which is noticeable among the middle classes whose purchases of 18-carat gold jewelry declined," the WGC said.
It added that Chinese investors prefer to buy gold when prices are rising in hopes of making a profit when they sell. But gold prices have been fluctuating which hit investment sentiment.
The WGC expects a recovery in Chinese demand in the fourth quarter on market speculation that China's new political leadership may unveil economic stimulus measures and the approach of the holiday gifts season.
Although consumption in India remained above China's for a second straight quarter, the WGC still expects China to become the biggest market this year.
Global gold demand slipped to 1,085 tons in the quarter from 1,224 tons a year earlier.
Gold is set for a 12th straight annual gain and investors boosted holdings in bullion-backed exchange-traded products to a record as central banks from the US to Asia took steps to bolster economies hurt by Europe's debt crisis.
Central banks are expanding gold reserves, with nations from Russia to South Korea adding to holdings this year. The banks bought 97.6 tons in the quarter, compared with 140.8 tons a year earlier, the council said.
That took buying so far this year to 373.9 tons and full-year additions will probably be in the bottom end of 450 to 500 tons. The council said in August that nations may buy close to 500 tons in 2012.
The Chinese demand for the bullion shed 8 percent annually to 185.1 tons in the third quarter as jewelry purchases were cut by 6 percent and investment fell 12 percent, the WGC said in its quarterly outlook yesterday.
"The slowing of China's economy had a negative impact on consumer sentiment, which is noticeable among the middle classes whose purchases of 18-carat gold jewelry declined," the WGC said.
It added that Chinese investors prefer to buy gold when prices are rising in hopes of making a profit when they sell. But gold prices have been fluctuating which hit investment sentiment.
The WGC expects a recovery in Chinese demand in the fourth quarter on market speculation that China's new political leadership may unveil economic stimulus measures and the approach of the holiday gifts season.
Although consumption in India remained above China's for a second straight quarter, the WGC still expects China to become the biggest market this year.
Global gold demand slipped to 1,085 tons in the quarter from 1,224 tons a year earlier.
Gold is set for a 12th straight annual gain and investors boosted holdings in bullion-backed exchange-traded products to a record as central banks from the US to Asia took steps to bolster economies hurt by Europe's debt crisis.
Central banks are expanding gold reserves, with nations from Russia to South Korea adding to holdings this year. The banks bought 97.6 tons in the quarter, compared with 140.8 tons a year earlier, the council said.
That took buying so far this year to 373.9 tons and full-year additions will probably be in the bottom end of 450 to 500 tons. The council said in August that nations may buy close to 500 tons in 2012.
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