Chinese gold demand tumbles 22pc in third quarter as higher price curbs demand
World Gold Council data shows Chinese demand plunge in the third quarter amid changing consumer preferences, price-induced selling and rise of experience-seeking millennials
Chinese gold demand plunged 22 per cent on year in the third quarter to a four-year low, as buoyant prices of the yellow metal, which surged to a three-year high in July, crimped consumer demand.
“The fourth quarter has started on a more positive note in China, thanks to the price drop in early October,” said the World Gold Council, which represents the world’s largest gold producers, in a report on Tuesday.
“Consumers were swift to respond to lower prices and remain alert to any further buying opportunities.”
The council pointed to the approach of key gold buying occasions, such as the festival and wedding season in India, Christmas in western markets and the Chinese new year as factors supporting demand. China and India are the world’s largest gold markets.
“But that is not to say that we expect a clear revival. Pressures remain,” the report said. “Government policy in India is disruptive to the market ... Chinese consumers are exhibiting changing tastes. The consumer environment in European markets and the US remains hesitant.”
Gold prices have fallen around 9 per cent in yuan terms since early October, on the back of strong economic data in the United States that pointed to a growing likelihood of an interest rate hike next month, which would dampen investment demand for bullion which does not earn interest.