Home Business Gold Demand Sinks to Six-Year Low as China, India Buyers Hurting

Gold Demand Sinks to Six-Year Low as China, India Buyers Hurting


By Eddie Van Der Walt

Appetite for gold shrank to the lowest in six years last quarter as buyers in China and India, the two biggest markets, saw incomes hit separately by a volatile stock market and a weak harvest.
Demand dropped 12 percent to 914.9 metric tons from the same period a year ago, the World Gold Council said in a report Thursday. In China, it fell 3 percent and in India by a quarter.
“China and India are very, very important players in the global gold market,” Alistair Hewitt, director of market intelligence at the London-based council said. Rural incomes in India suffered from a weaker-than-expected harvest last year and poor weather this year, Hewitt said.
Gold prices have sunk 5.1 percent this year, on course for their third consecutive annual decline, the longest losing streak since 2000. Investors have decreased positions in exchange-traded funds every month since May, with holdings at a six-year low. An ounce of gold fetched $1,124.29 in London on Wednesday, according to Bloomberg generic pricing.
Global jewelry demand slid 14 percent to 513.5 tons in the second quarter from a year earlier, and investment demand was 11 percent lower at 178.5 tons, the council said.
Central banks remained net buyers, increasing purchases by 11 percent to 137.4 tons from the previous quarter. That’s their 18th consecutive quarter of purchases, Hewitt said. He sees them buying 400 to 500 tons by the end of the year.
Total supply dropped 3.9 percent from the previous quarter to 1,032.6 tons, a second straight decline, led mainly by a 28 percent slide in quarter-on-quarter recycling to 251.1 tons.[pro_ad_display_adzone id=”70560″]
Indian and Chinese demand is seen recovering in the second half, with each nation expected to consume 900 to 1,000 tons for the whole of the year, Hewitt said.
The council is hearing “positive stories of greater traffic at jewelry retailers, of banks talking about greater interest in bar and coins and gold accounts,” he said. A reasonable harvest this year “should support gold demand when we come to the crucial Diwali period” in India, Hewitt said.(bloomberg)

Previous articleConductor bag 2 months imprisonment for assault, criminal force, causing grevious hurt
Next articleAt least 6 killed in Boko Haram attack near Nigeria’s Maiduguri

Leave a Reply