China’s consumption of gold rebounded in the third quarter as both gold investment demand and the jewelry sector surged.
China’s demand for gold reached 177 tons in the third quarter, 34.1 percentage points higher than the previous three months. Among them, 119 tons of jewelry were consumed, a 30.8 percent quarter-on-quarter rise, and investment in gold bars and coins increased 41.5 percent from the previous quarter to 58 tons.
A record local gold price of US$1,900 per ounce and lingering global uncertainties combined with improved economic conditions in China increased gold investment demand markedly.
“China’s gold bar and coin sales in Q3 represents a significant increase, reflecting the strong safe-haven demand of investors, as well as their tendency to follow price trends. In addition, the expansion in the domestic gold exchange-traded fund (ETF) market also accelerated, with four newly listed funds in the third quarter bringing the total of new listings to seven,” said Roland Wang, managing director China of the World Gold Council.
An ETF is a type of investment fund and exchange-traded product.
The quarterly recovery of China’s jewelry sales was helped by many couples postponing their weddings to Q3 and Q4 due to the COVID-19 crisis. Weddings due to take place earlier in the year were rescheduled as China eased restrictions.
The World Gold Council believes jewelry sales will further rise in the fourth quarter, as retailers were stocking up for an anticipated wedding gold jewelry sales boom, according to a council’s survey.
A recent report by Suning.com – one of China’s largest online shopping platforms – their system showed sales of wedding-related products surged 129 percent in September year on year, ahead of the October Golden Week holiday which was packed with postponed wedding ceremonies due to the pandemic.
Also, the 10 percent pullback in the price from the August peak helped lift demand for the remainder of the quarter, while rallying gold prices discouraged consumers from buying in July.
Meanwhile, retailers have introduced more light weight gold jewelry to cushion the impact brought by higher prices.