Gold: Weaker demand for jewellery in China, but stronger demand for bars and coins – Commerzbank
Source Fxstreet
Demand for Gold in China weakened in the first half of the year, Commerzbank’s commodity analyst Carsten Fritsch notes.
Two opposing trends in Gold demand
“According to the China Gold Association, demand for Gold in China amounted to 524 tons, 5.6% lower than in the same period of the previous year. There were two opposing trends. Demand for jewelry fell by just under 27% to 270 tons. According to the CGA, this was due to the sharp rise in prices, which also led to a significant decline in jewelry processing.”
“According to Bloomberg calculations based on CGA data, demand for jewelry even fell by more than 50% in the second quarter. This contrasted with a 46% increase in demand for bars and coins to 214 tons. This was due to stronger demand from Chinese households for Gold as a safe haven. The problems on the Chinese property market and falling interest rates are also likely to have played a role.”
“Accordingly, jewelry demand and demand for bars and coins have clearly converged in terms of volume. The share of jewelry demand in total demand fell to 51.6%, while bars and coins accounted for 40.8%. This development is consistent with the figures in the latest report of the World Gold Council.”
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