China’s gold demand fell 19% in the first six months of this year as investors bought fewer bars and coins, offsetting increased demand for jewelry, the China Gold Association said, according to a Bloomberg report.
Consumption in China, which passed India last year as the world’s biggest user, slid to 569.5 tonnes, the Beijing-based association said in a statement that was reported by Bloomberg.
Demand for bars sank 62%, while gold use in jewelry rose 11%, according to the statement.
An 8.9% price rise this year amid unrest in Ukraine and the Middle East has hurt consumption in China, which is expected to be “more or less the same” on a full-year basis in 2014, Zhang Bingnam, vice-chairman and general secretary at the association, said in an interview with Bloomberg in Singapore last month.
Spot gold was off US$1.705 to US$1,305 an ounce on Wednesday.
Shares of Barrick Gold Corp.
, Stock Forum
) were off 0.10% to $20.19, leaving a market cap of $23.5 billion, based on 1.2 billion shares outstanding. The 52-week range is $23.78 and $16.19.
Martin Murenbeeld, Chief Economist at Dundee Capital Markets said the China Gold Association report is not much of a surprise given that 2013 was an usual year as buyers in China were fighting each other off in a bid to buy gold at around the US$1,300 an ounce level, a price that was considered cheap at the time.
A veteran gold analyst, based on Vancouver Island, British Columbia, Murenbeeld said it’s a matter of opinion how geopolitical issues will impact the yellow metal in the near term.
“In my opinion, things are likely to get worse before they get better,’’ he said.
If that’s the case, it will lead to an uptick in the price of gold, he said.
Meanwhile, to get a true picture of gold demand in China, Murenbeeld said analysts monitor imports from Hong Kong and deliveries through the Shanghai Gold Exchange.
“We kind of think that overall demand (in China) will be down this year,’’ he said.