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A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Gold demand in China — the world’s biggest consumer — plunged by more than a fifth in the third quarter as record prices and a sluggish economy dented consumption, especially for jewelry.
Total demand fell by 22% to 218 tons in the three months to September, according to Bloomberg calculations based on data from the China Gold Council on Monday. Jewelry consumption tumbled 29% to 130 tons, while for bars and coins there was a 9% drop to 69 tons.
Gold prices have rallied by about a third this year, hitting a fresh peak last week, on increased purchases by central banks, as well as sustained haven demand from investors. That surge has made jewelry purchases much more expensive at a time when many Chinese consumers are already feeling the strain from a prolonged slowdown in the economy.
Over the first three quarters, gold consumption fell by 11% to 742 tons, according to the council. Last month, non-monetary imports dropped to 97 tons, down 22% from a year ago, although they rose from August.
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