China’s demand for gold dropped 13 per cent in 2019 as marriages, births also plunged
- Gold consumption in China plunged 13 per cent in 2019 to 1,003 tonnes, the China Gold Association says
- Last year, births in China’s dropped to their lowest since 1961, while marriages reached their the lowest level since 2007
China, the world’s largest gold market, said its consumption of gold plunged 13 per cent in 2019 to 1,002.78 tonnes as international gold prices soared and marriages and births shrank at home.
It marked the first fall since 2016, with the absolute consumption the lowest in the last three years, according to data from the China Gold Association.
Gold jewellery consumption, which accounted for around two thirds of the total, fell 8.2 per cent to 676.23 tonnes, while consumption of bullion and coins, which are often used as alternative investments, plunged 27 per cent to 225.8 tonnes, the association said.
Industrial use of gold in China also dropped 4.9 per cent to 100.75 tonnes last year.
According to the World Gold Council, gold had its best performance since 2010 last year, gaining 18.4 per cent in US dollar terms.
Jingyi Pan, a market strategist at brokerage firm IG Group, said that gold prices rose more than 20 per cent for Chinese consumers in 2019 due to the depreciation of the yuan against the US dollar, turning away price-sensitive investors and consumers.
Domestic gold consumption in China has a volatile track record having surged 41.4 per cent in 2013 to a record high 1,176 tonnes as retail investors rushed to take advantage of a fall in the gold price, before consumption fell 25 per cent the following year to 886.09 tonnes.
China’s economic growth dropped to 6.1 per cent last year, the lowest level in nearly three decades, according to the National Bureau of Statistics.
Last year, China also registered 9.5 million marriages, the lowest since 2007, due to a shrinking younger population, seen as a consequence of its one-child policy.
China’s total jewellery consumption by value, including gold, platinum and diamonds, rose just 0.4 per cent in 2019, according to China’s National Bureau of Statistics, making it the second worst performing consumer spending sector after cars.
In comparison, China’s overall retail sales rose 8.0 per cent in 2019, including a 10.2 per cent increase in beverages as well as 12.6 per cent increase in cosmetics.
Last year, the People’s Bank of China increased its gold reserves to 62.64 million ounces from 59.56 million ounces at the end of 2018.
Gold production in China, which is also the world’s largest gold producer, also dropped 5 per cent to 380.23 tonnes, China’s gold association said, meaning that China is still heavily reliant on imports to satisfy its demand.
Note: The story has been republished to correct the original volumes of gold.
