China's Gold Demand Hit 3-Year Low

SEATTLE (Scrap Monster): The latest trade statistics published by the China Gold Association indicates significant fall in gold output and consumption by the country in 2019. The country’s gold consumption hit the lowest level in three years, primarily on account of high gold prices and economic slowdown in the country.

As per date, the Chinese gold consumption totalled 1,002.78 tonnes in 2019, which is significantly lower by 12.91% when compared with 2018. The downward pressure on Chinese economy coupled with rising precious metals prices in the second half of the year contributed to the huge demand drop. Domestic gold prices surged higher by more than 18% in China during the previous year.

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The high gold prices resulted in a ‘wait and see’ approach by gold investors. The commercial bank and key enterprises reported notable decline in sale of gold bars.

The consumption of gold jewellery, at 676.23 tonnes, was down by 8.16% in 2019. The gold bar and coin consumption dipped by nearly 30% year-on-year to 225.8 tonnes. Meanwhile, the country’s gold production witnessed decline by 5.21% over the previous year to total 280.23 tonnes in 2019, as production from domestic gold mines plunged.

Meantime, BMO Capital Markets foresees further drop in Chinese gold production in 2020, aided by environmental concerns.