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China’s gold consumption fell by almost half in the first quarter as coronavirus containment measures and rising prices hit demand in the world’s biggest market, the China Gold Association said on Tuesday.
Consumption totalled 148.63 tonnes in January-March, down 48.2% from a year earlier, the association said in statement on its website, with consumption of jewellery down 51.1% to 92.04 tonnes and that of gold bars and coins down 47%.
“Since the outbreak, the country has adopted strict prevention and control measures (and) consumer demand has faced an impact,” Secretary General Zhang Yongtao said in the statement, also noting that prices had increased.
Benchmark spot gold prices have risen about 13% so far in 2020 and this month hit a more than a seven-year high, mainly on safe-haven buying from investors looking to hedge against a global recession due to coronavirus lockdowns.
In China, physical gold demand has suffered as the lockdowns kept buyers away and activity has yet to pick up even after some restrictions were lifted.
Under normal circumstances, gold sales during the Lunar New year holiday in China would account for around 10% of annual sales volumes, Zhang said.
But this year they dropped sharply, he noted, as the week-long holiday, which fell in late January, coincided with a rapid escalation in infections.
Gold production in China fell by 10.93% from a year earlier to 82.63 tonnes in January-March, the association said.
“At present, the impact on mining and investment is relatively limited,” compared to that on jewellery consumption, Wang Lixin, managing director of the World Gold Council in China, said in the statement.
(By Tom Daly and Arpan Varghese; Editing by Louise Heavens and David Evans)
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