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China’s Gold Bar Demand Up More Than 40% This Year
(Kitco News) - China continues to surprise this year, with gold consumption jumping 15.49% during the first three quarters of 2017, according to the latest national data released on Wednesday.
The demand is up at 815.89 tonnes already, China Gold Association said. Purchases of gold bars surged 44.45%, while gold jewelry buying rose 7.44%, equaling to 222.07 tonnes and 503.87 tonnes, respectively.
The physical side of the gold market is said to be doing well because of rising consumption in China's “second- and third-tier cities,” “cooling property market and volatile securities market,” Xinhua News Agency quoted the association as saying.
On the production side, gold output was down 3.76% during the first three quarters of 2017 compared to last year, totaling 374.981 tonnes.
In a recent RBC Capital Markets’ report, commodity strategist Christopher Louney noted that physical gold demand is a critical component to consider when forecasting future price movements.
Louney also highlighted China as a key market for consumer demand.
“India and China alone represent more than 50% of global jewelry, bar and coin demand in any given period . . . China represents a bright spot with its upward trajectory, a theme we expect to remain intact for some time given divergent gold policy stances among the world’s two largest consumers,” he said.
ANZ senior commodity strategist, Daniel Hynes, told Kitco News in October that he is bullish on gold prices in the near future because he sees a recovery happening in the physical demand for gold, especially in Asia.
“The physical market has held up relatively well, showing good sings in China and India,” Hynes said. “We are carefully watching the import data into both countries to determine whether that physical market continues to improve.”
China saw a period of import quotas restricting demand. “Yet, going into the new year, we are hopeful that those constraints will be lifted, or at least recede, and import demand will recover,” Hynes added.
