Demand for gold in China weakened during the first half of the year, as noted by Commerzbank’s commodity analyst Carsten Fritsch.
Contrasting Trends in Gold Demand
According to the China Gold Association (CGA), gold demand in China totaled 524 tons, a 5.6% decline compared to the same period last year. Two opposing trends emerged during this period. Jewelry demand plummeted by nearly 27%, falling to 270 tons. The CGA attributed this drop to a sharp rise in prices, which significantly impacted jewelry processing.
Bloomberg calculations based on CGA data indicated an even steeper decline in jewelry demand, with a more than 50% drop in the second quarter alone. In stark contrast, demand for gold bars and coins surged by 46%, reaching 214 tons. This increase was driven by Chinese households seeking gold as a safe haven amidst problems in the Chinese property market and falling interest rates.
As a result, the volume of jewelry demand and demand for bars and coins has become more aligned. Jewelry’s share of total gold demand fell to 51.6%, while bars and coins accounted for 40.8%. This trend aligns with the latest figures from the World Gold Council.
