Gold bar demand dives
May 8, 2014 Category Automotive Metals & Minerals, Metals
China’s gold consumption in the first quarter of 2014 eased significantly from last year mainly because of reduced demand for gift-related gold bars, experts said. In the January-March period, gold consumption was 322.99 metric tons, rising 2.45 tons or 0.76% year-on-year. Gold jewelry purchases jumped 30.2% to 232.53 tons, while gold bar consumption slumped 43.56% to 67.95 tons, the China Gold Association (CGA) said. The drop in gold bar demand was a result of China’s austerity campaign, according to Albert Cheng, Far East Managing Director of the World Gold Council (WGC). “On the whole, China’s gold consumption in the first quarter maintained growth, which is very satisfactory, as 2013 was an unusual year for the gold markets in China and the world. China’s gold demand rose very strongly last year, and demand this year will noticeably slow down,” Cheng said. He added that China’s demand for gold will maintain a growth rate of 20% to 25% in the next four years. In 2013, China became the world’s largest gold producer, consumer and importer. Gold consumption surged 41.36%, while gold production went up 6.23% year-on-year, according to the Association. A report from the WGC said on April 15 that following the record level of Chinese demand in 2013, this year would likely see consolidation and succeeding years would see steady growth. The private sector demand for gold in China is set to increase from the current level of 1,132 tons per year to at least 1,350 tons by 2017, the report said. China however has little influence on the gold price. “The gold price will remain weak in the near future, while China’s gold industry will be confronted by great challenges. Domestic enterprises must join hands to combat difficulties, including maintaining healthy competition, advancing technology for innovation and further reducing costs,” said Song Xin, President of the China Gold Association. Last week, the Association, together with the CPM and Jingyi Gold Co, launched the Chinese version of the CPM Gold Yearbook 2014. In the first quarter of this year, China’s gold production reached 96.50 tons, an increase of 7.33% from a year earlier, the China Daily reports.
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