World gold demand slides on slowdown in Chinese economy

City A.M. Reporter
GLOBAL gold demand dropped 11 per cent in the three months to September from record levels seen in the same period last year, dampened mainly by fading Chinese fervour as its economy slowed, with stronger Indian demand stemming a larger fall, the World Gold Council said yesterday.

Chinese gold consumption fell eight per cent in the July to September period to 176.8 tonnes, the WGC’s quarterly demand trends report showed, with both jewellery and investment demand hurt by a slowing economic growth.

Data last month showed China’s economy slowed for a seventh straight quarter in the July to September period. Chinese bar and coin investment dropped 12 per cent to 53 tonnes, while jewellery buying fell five per cent to 123.8 tonnes.

“The fall in Chinese demand coincides with weaker economic numbers in China in the third quarter,” the WGC’s managing director of investment research Marcus Grubb said. “There is some evidence that the economic situation is stabilising in China and recovery is starting... it’s possible that the stimulus measures have worked and the economy has bottomed out.”

“If that’s true, we won’t see a repeat of this Chinese weakness in the fourth quarter,” he said.

China is second to India as the world’s biggest gold consumer. Indian demand rose in the last quarter by nine per cent to 223.1 tonnes, reversing the trend of the previous three quarters, with pent-up consumer demand lifting the market. Global jewellery consumption dipped two per cent to 448.8 tonnes, while coins and bar demand fell 30 per cent.