A report for China Thursday showed that China’s gold consumption rose 48.44 percent year-on-year to 813.59 tons during the first three quarters as macroeconomic policies supported demand.
The China Gold Association said domestic gold consumption during the first nine months was 5.89% higher than the pre-COVID level from January to September 2019.
It added that the consumption of gold jewelry in China rose 54.21 percent from a year earlier to 529.06 tons during the first three quarters, with a level of 1.11 percent higher than in 2019.
It added that gold price fluctuations and the recovery of China’s domestic economy boosted investment demand in gold, while sales promotions also encouraged buying of the precious metal.
According to the association, sales of gold bars and coins increased by 50.25 percent during the same period to reach 214.13 tons. Purchases of gold for industrial and other uses increased by 12.66 percent from the previous year to reach 70.4 tons.
An analyst said China’s domestic gold consumption was on track to recover during the first three quarters of this year as the expensive commodity found increasing acceptance as an investment option.
“Gold has a safe appeal amid geopolitical tensions due to the low-to-negative interest rate environment and expanding global money supply,” said Zhou Yi, chief metals and mining analyst at Bloomberg Intelligence.
“While China’s demand for jewelry-related gold during January-September increased 54.21 percent year on year, we expect demand to continue growing in the fourth quarter,” Zhou said.
The World Gold Council said that the global demand for gold fell in the third quarter to its lowest level since the last quarter of 2020, as financial investors sold the metal. However, demand was strong from jewelers, central banks and smaller individual investors buying gold bars and coins.
In its latest quarterly report, the World Gold Council said global gold demand in the July-September period was 831 tons, down from 894.4 tons in the same period last year and 1084.9 tons in the third quarter of 2019.
Exchange-traded funds with gold sold off the precious metal last year as economic growth picked up and again this year as attention turned to higher interest rates that would make gold assets less attractive.
According to Louise Street, Senior Market Analyst at WGC, demand for jewelry is expected to continue to exceed last year’s levels, but overall investment demand will be weaker in 2021, despite good demand for coins.