Demand for gold slips to 6-year low

Shanghai (Aug 13)  Global demand for gold fell to a six-year low in the second quarter, partly due to cooling consumer markets in India and China, an industry organization said yesterday.

Total demand for the precious metal, including jewelry, investment, industrial and central bank buys, in the April-June period fell 12 percent year on year to 915 tons, the World Gold Council said in a report.

Demand in the first three months fell 1 percent year on year, said the industry group, which represents 19 of the world’s leading gold mining companies.

Demand for jewelry in the second quarter fell 14 percent year on year to 513 tons, while investment demand dropped 11 percent to 179 tons, according to the report.

In India, jewelry consumption fell 23 percent to 118 tons, while in China it dropped 5 percent to 174 tons, it said.

The dip in China was due to its slowing economic growth and strong stock market in the first half, while in India there was a dearth of auspicious days for marriages, the report said.

Sentiment was also hit by cooling prices in the quarter, which fell from US$1,134 to US$1,086 an ounce.

In investment terms, gold demand in India fell 30 percent year on year, but rose 6 percent in China.

Meanwhile, consumption in the United States and Europe improved, the report said.

Roland Wang, managing director of WGC China, said that a weakening yuan might help boost China consumption and investment as a means of hedging against the currency depreciation.

Source: ShanghaiDaily