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English>>China Business

Gold loses luster in domestic market

By Wu Yiyao  (China Daily)

08:01, August 17, 2012

The Chinese are not eager to buy gold as the price of the metal stagnates and the country's GDP grows at a slower pace, according to a report issued by the World Gold Council on Thursday.

In China, the amount of gold jewelry sold in the second quarter of 2012 decreased by 9 percent year-on-year to 93.8 metric tons, the report said. The jewelry's value meanwhile decreased at a gentler rate, going down 6 percent year-on-year to 30.7 billion yuan ($4.82 billion).

That was still 17 percent greater than the average quarterly value of 26.4 billion yuan that the sales showed during the past five years.

Also in the second quarter, 51.1 tons of gold were bought for investment purposes, an amount down 4 percent year-on-year. The report said a lack of direction in gold prices was leading Chinese investors to think twice about buying the metal.

It said the Chinese often buy gold jewelry only when the price of such goods is showing a definite trend.

The second quarter of 2012 also saw the amount of gold purchased globally decrease by 7 percent year-on-year and by 10 percent from the previous quarter. The lack of a clear price trend has prompted various responses from buyers around the world.

Amid the eurozone's ongoing sovereign debt crisis, European investors, for one, have kept their conviction that they can safely preserve capital by putting it into gold, the report said.

And retail investors bought 77.6 tons of gold in the quarter, up 15 percent year-on-year. That was 19 percent higher than the 65.2 tons they had bought every quarter on average in the past five years.

Also in the quarter, official institutions bought 157.5 tons of gold, a record amount and more than double what they had purchased in the same period a year ago. Altogether, they were responsible for 16 percent of global gold purchases during the period.

Among the central banks that bolstered their holdings in the second quarter were the National Bank of Kazakhstan, and the central banks of the Philippines, Russia and Ukraine.

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Leave your comment1 comments

  1. Name

helen at 2012-08-18203.82.80.*
The Chinese government has facilitated the general population to hedge in gold in view of global economic meltdown and it is up to them to take advantage of such policies.Please don't let the 'burnt' gold speculators discourage you .....Invest not punt in physical gold ....

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