Physical Gold Sales Posted Continuous Decline in China

SEATTLE (Scrap Monster): The recent report published by the World Gold Council (WGC) analyzes the retail gold businesses by Chinese commercial banks.

The report points out that the country’s physical gold investment market has witnessed tremendous growth since its liberalisation in 2004. In 2013, the country turned out to be the world’s largest gold bar and coin market, mainly driven by the economic expansion. The commercial banks in the country have played a key role in this development.

However, physical gold sales at banks have witnessed continuous decline since 2015, after growing at an average of 22% per annum for almost a decade since 2004. The country’s gold consumption had peaked in 2013 at 1,346 tonnes. Since then, demand has declined and remained subdued, mainly due to lower growth in the country’s economy and higher uncertainty around its outlook.

ALSO READ:

Gold-backed ETF Holdings Hit New All-Time Peak in Q3

World Gold Supply Declined 3% in Q3, Says WGC Demand Trends Report

According to WGC report, most of the branches of Chinese commercial banks across the nation offer physical gold products for sale. The data for the initial nine-month period of the current year indicates that nearly 40% of all gold bar sales in the country were transacted through these branches. The gross physical gold sales from these banks posted 10% year-on-year decline in 2019.

The Council noted that the current economic environment opens an opportunity for commercial banks to revitalize their gold businesses.