China gold demand plunges in Q2

By Hu Xiaocen | August 14, 2014, Thursday |

Online Edition

CHINA’S gold demand plunged 51 percent from a year earlier in the second quarter, as both jewelry consumption and bullion investment dropped, a report showed today.

Gold jewelry consumption shed 45 percent year-on-year to 154.7 tons in the second quarter in China, while bar and coin investment slumped 62 percent to 53.3 tons, the World Gold Council said in the report.

China’s total gold consumption is expected to reach 900 to 1,000 tons this year, said Albert Cheng, the council’s managing director for the Far East.

Gold prices in China were at a discount during the second quarter, which confirmed a muted appetite in the period. Additional, the buying spree during the April-June period last year has brought forward a great deal of purchasing, according to the London-based industry association.

Gold price volatility in the second quarter was well below average levels, showing weak conviction in direction. Therefore gold investors were held off from buying gold.

Total global gold demand stood at 964 tons in the second quarter, 16 percent lower than the same period last year. Gold jewelry consumption, which represents more than half of total global, dropped 30 percent to 510 tons, said the report.

It was the 14th consecutive quarter in which central banks were net purchasers of gold, mainly due to asset diversification and ongoing geopolitical tensions in Iraq and Ukraine. They bought 118 tons of bullion in the second quarter, 28 percent more from a year earlier.

The People’s Bank of China held 1,052.1 tons of gold as of the end of June, which accounted for only 1 percent of its reserves.

Business Finance

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China gold demand plunges in Q2

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