Loading ...Gold demand in China shrank in the second quarter as consumers in the biggest user bought fewer bars, coins and jewelry amid a clampdown on corruption and as the buying spurred by last year’s price slump wasn’t sustained.
Purchases in Asia’s largest economy plunged 52 percent to 192.5 metric tons in the three months to June from a year earlier, contributing to a drop in global consumption, the London-based World Gold Council said in a report today. Every Asian economy tracked by the producer-funded group bought less bullion in the period, apart from Taiwan, as demand across the biggest consuming region shrank 46 percent to 470.9 tons.
While gold’s tumble into a bear market in April last year spurred a purchasing frenzy that helped to push China’s demand above India’s, the pace of buying dropped this year. The data add to signs of slowing bullion consumption in Asia as banks including Goldman Sachs Group Inc. expect prices to resume losses. President Xi Jinping stepped up an anti-graft drive in China this year, hurting demand for luxury goods.
“The data confirms our view that Chinese gold demand will stay relatively weak compared with 2013, which only serves to drag gold prices lower into the second half,” said Barnabas Gan, an economist at Singapore-based Oversea-Chinese Banking Corp.
Gold for immediate delivery advanced 9.6 percent this year to $1,316.84 an ounce at 4:43 p.m. in Shanghai. Prices increased 3.4 percent in the three months through June compared with the 23 percent drop a year earlier, which was the largest quarterly slide since at least 1920.