Gold jewelry demand rises in 2Q
Source: www.chinamining.org Citation: Global Times Date: Aug.16, 2013
Chinese consumers` demand for gold products like gold -jewelry saw a significant increase in the second quarter due to falls in gold prices, the World Gold Council (WGC) said in a report Thursday.
Consumer demand in China showed strong growth, totaling 276 tons in the second quarter, a rise of 87 percent compared with the same quarter of last year, as investors used the -lower gold price to buy in advance of expected future price rises, the WGC said in its Gold Demand Trends report.
Jewelry demand in the -second quarter was 153 tons, up 54 percent compared with the same quarter of last year, while bar and coin investment was 123 tons, up 157 percent over the second quarter of last year, the report said.
Middle-aged Chinese women are one of the major groups of buyers for gold products.
"Most of our customers for bar and coin investment are the ladies around 40 years old who plan to buy in at low prices to maintain capital value," Jiao Guangyi, deputy general manager of Beijing Sun Gold Store, told the Global Times Thursday.
Since the prices for gold jewelry declined to around 350 yuan ($57.23) per gram recently, the lowest level since 2010, it is "a good opportunity for investment at present," Jiao said.
Jiao predicted gold prices will rise in a long term as some gold mines around the world have reduced production due to the recent price declines, and "fewer supplies will consequently lead to price hike," Jiao said.
China`s leading gold and metalliferous resource company Zijin Mining Group Co announced Wednesday that it will reduce the target for gold production this year by 2 tons to 31 tons.
Other world leading gold companies are also planning to cut output. Barrick Gold Corp announced earlier this month that it planned to sell or close 12 gold mines, and its gold production will also possibly be reduced this year.
However, an analyst told the Global Times Thursday that those middle-aged Chinese women were "too hasty" to invest in gold products in the past three months and their money will possibly be "trapped" due to their blind investments.
"International gold prices are unlikely to rebound within three to five years based on the expectation of QE withdrawal by US Federal Reserve, which consequently will prompt a drop in gold prices," Sun Yonggang, a gold analyst from Everbright Futures Co, told the Global Times.
Federal Reserve Chairman Ben Bernanke said at a news briefing in June that the US was about to start a total withdrawal from QE if economic data indicated the US economy is on a trend of recovery.
Driven by the demand for gold in China and India, which are the biggest markets for gold, the global jewelry demand hit 576 tons in the second quarter, up 37 percent from 421 tons in the same quarter last year, reaching its highest level since the third quarter of 2008, according to the WGC report.
Bar and coin investment grew by 78 percent globally compared to last year, topping 500 tons in a quarter for the first time, the report said.
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