CHINA’S gold consumption in the first half of 2024 fell by 5.61 per cent from the same year-ago period, data from the Gold Association showed on Sunday (Jul 28), as high prices curbed purchases of gold jewellery.
The world’s largest gold user consumed 523.75 tonnes of the precious metal during the January to June period.
Buying of gold jewellery, 51.6 per cent of the total consumption, tumbled by 26.68 per cent from the year before to 270.02 tonnes from January to June.
“High gold prices have increased the operational risk for gold processing and sales enterprises,” the Gold Association said.
“Purchase from wholesale and retail enterprises declined, and the processing volumes of jewellery also significantly decreased.”
The most-traded gold futures contract on the Shanghai Futures Exchange climbed by 21.7 per cent to a record high at 588.28 yuan (S$108.80) a gram on Apr 15. The contract posted a rise of 14.1 per cent in the first half.
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High prices also dampened appetite of the central bank for bullion, with China refraining from gold purchase for a second straight month in June when its gold reserve totalled 2,264.33 tonnes.
Purchasing of gold bars and coins, however, surged by 46.02 per cent to 213.64 tonnes over the same period, or 40.8 per cent of the total, as the safe-haven assets gained renewed favour among investors amid persistent geopolitical conflicts and the weak global economic recovery.
China’s gold output made of domestically produced raw materials rose by 0.58 per cent from the year before to 179.63 tonnes in the first half.
“The output increase missed expectations because the easily mined resources in old mines gradually reduced while the construction of new mines faced problems,” it said.
“Also some miners scaled down or shut down production amid increasingly stringent environmental and safety requirements.”
Output of gold from imported raw materials rose 10.14 per cent to 72.03 tonnes, bringing the total gold output in China in the first half of the year to 251.66 tonnes, an increase of 3.14 per cent year on year. REUTERS
