The sale of 18-carat gold slid the most in the third quarter, largely because of softening consumer demand for jewelry items. The slowdown also hurt the sale of gold bars and coins, investment analysts said.
"The slowing Chinese economy clearly had a harmful effect on consumer confidence. Investors also didn't want to strike big deals before the new leadership is elected," said Albert Cheng, the council's managing director in charge of the Far East region.
But he believes Chinese demand will recover in the fourth quarter, as the new leadership in the country is expected to roll out stimulus measures, and as the holiday gift-giving seasons approach.
He highlighted the country's annual Spring Festival season, when gold ornaments are chose usually chose as favorite gifts, and companies in China buy jewelry and other luxury items to give as bonuses to staff and as a way to thank customers.
The gold council said that Chinese investors' preference to buy into rising prices also contributed to the drop in investment demand, as the gold price weakened in July and August, and added that it expected demand to pick up as the markets strengthen.
Gold lost 3 percent to $1,652 per ounce in the third quarter, from $1,702.1 in the same period last year.
Xu Wenjun, deputy head of Shanghai Gold and Jewelry Trade Association, also said he expected a surge in jewelry demand during the rest of this year and start of next, as the Christmas and New Year holidays approach.
But he expected a shift in the way Chinese consumers buy gold products.
'Gangnam style' life of young rich in Chongqing
Feedback
RSS
