China’s falling out of love with gold, demand drops 19%
China’s demand for gold slumped 19% in the first half of 2014 as lower sales of bars and coins offset a rise in jewellery acquisitions, latest figures from the China Gold Association show.
Gold consumption in the country, which last year overtook India as the world’s largest gold buyer, fell to 569.5 tonnes, with the weakness in the yuan adding to higher spot prices, while the heavy buying last had seen stocks rise to unsustainable levels, Bloomberg reports.
Brokers said gold bars are the most speculative and price sensitive area of the market. China bought a record 1,176 tons of gold in 2013, but is expected to be slightly below that figure this year.
The drop was somehow expected. Customs data for May from Switzerland – the main trading hub for the global physical trade in gold – showed a 59% drop in exports to Hong Kong to just over 10 tonnes. Cargoes going to Mainland China plummeted by 83.5% the same month to a mere two tonnes, compared to 37 tonnes back in February.
However, long-term demand from the country is expected to expand to at least 1,350 tonnes by 2017, due to rising wealth, the World Gold Council noted in April.
In addition to being the world’s biggest consumer of bullion, China is also the world’s largest source of mined gold. Over the past decade, production has doubled from 217 tonnes to 437 tonnes.
Courtesy of the World Gold Council. (Click to enlarge)
Gold demand is expected to improve through the Southeast Asia region in the second half of the year as the Singapore Exchange gears up to launch a new physically-delivered gold contract in September.
The city is seeking to become a gold trading hub, and has removed a goods-and-services tax on gold to attract clients.
Image by ShingWong|WikiMedia Commons
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11 Comments
geeee
more BS on China gold consumption, Bloomberg is a terrible source, their tracking is partial at best. I’m surprised reputable news sites even report gold number by Bloomberg as they have been proven woefully inadequate and no pros use them anymore.
RB
Bloomberg is in bed with JP Morgan… not only that… it is VERY pregnant. Bloomberg is helping JP Morgan and other banks to exit the short positions they have on gold in the most expeditious way possible. July 28 is the BIG day!
RB
Ah ha! I just looked after I sent the message below… Gold has sold off $10 to be below the magic number of $1300 in the weakly-traded foreign markets!
RB
Come-on Hamas! Put some rockets into some highly populated places! How about another air plane/rocket disaster…. The big banks cannot control the craxy people in the world.
idigmines
An earlier article stated that China has found ways to import gold directly to Beijing by-passing Hong Kong. If true, would that make demand look lower and keep pressure off the price?
idigmines
RB, gold has very little correlation with Geopolitical unrest and violence anymore. There was a time when Gaza alone would have sent gold through the roof, let alone adding Ukraine, Syria, Iraq, Iran, and the South China Sea.
No one seems to know what drives the price although it seems to be correlated with bond rates, sovereign bank purchases, and some sort of sentiment?
So, you could probably have more of an effect on reducing violence and suffering by doing something other than ranting against gold.
Or you’re short gold and are about to s$#t yourself because you’ve got to cover your bet SOON?
idigmines
Whoever is dropping the big tens-of-millions of dollars SELL BOMB every time gold looks like it’s about to go above $1300 controls the price.
idigmines
All the theories, conspiracies, conspiracy theories, complexities of the supply chain, history, mystery, economics, are what make it interesting. Who cares if it has any utility value? It’s rare, expensive, aesthetically desirable, and people just want it – “…my precious.”
“There is nothing either good or bad, but thinking makes it so.”
I’m done. Gotta go fill the coffee cup.
idigmines
Oh, RB, I just sold a huge Au futures contract short on your rumor about Bloomberg and JPM.
idigmines
Cecilia, you got the trout out of the water with that fly pattern.
Anthony Maw
Is this article dis-information or mis-information? Something stinks….