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Chinese gold consumption reaches pre-pandemic levels

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(Kitco News) - It was reported during the Asian session that Chinese gold consumption soared 93.9% in the first three months from the same quarter a year earlier. This was according to the China Gold Association who released the report on Friday.

China is the world's largest gold consumer and they saw consumer demand in the first quarter of 2021 rise to 286.4t from the previous quarter. The surge in demand for gold is supported by factors of improving economic conditions, lower gold prices, and the massive sale related to holidays. China's March net gold imports through Hong Kong surged to the highest level since December 2019 after new import quotas were issued by the central bank due to increased demand. It was recently reported that the government also opened the path for more gold imports for banks in the nation too. There were also some celebrations over the reported period as the Chinese public celebrated Lunar New Year and Valentine's day.

In the interest of fairness, the large percentage change is largely due to the bounce back from the post-pandemic lows. The levels reported are back to pre-pandemic levels. Purchases in the country 288.2 tonnes (for the quarter), compared with 148.63 tonnes a year ago, the association said in a statement on its website. They also added, “Recovery in the macroeconomy and falling gold prices have also extended enthusiasm towards gold investment,". Some much-needed support for the gold price in the near term.

The spot gold price has bounced back in recent weeks after hitting a low of $1676.91/oz on 8th March. Today the price is nearly 6% higher at $1778.87/oz and the bulls have taken out the resistance at $1764.73/oz. There is still lots of traffic on the way up but with the price continuing to make higher highs and higher lows there is hope that the psychological $1800/oz psychological barrier can be broken once again.

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