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Gold Production Up, Demand Down
Gold demand on the Chinese mainland during the first three quarters this year slightly declined but output increased significantly.
According to sources from the World Gold Council, the gold demand on the mainland was 148.5 tons during the period, a modest decrease of 0.5 tons compared with the same period of last year.
But the gold output increased by 3.6 per cent year-on-year to 120.8 tons during the first three quarters, said sources from the Gold Administration under the State Economic and Trade Commission.
The consumption of gold for jewellery was restrained during the third quarter despite many price wars by retailers, said Roland Wang, manager of the gold council (North China).
Jewellery takes the lion's share of gold demand on the Chinese mainland.
The council statistics show that gold demand during the third quarter fell 4 per cent year-on-year to 46.0 tons, the same level as in the second quarter of this year.
This year witnessed many price wars on the mainland gold jewellery markets, especially in big cities such as Beijing, Shanghai, Nanjing and Guangzhou.
In Beijing, jewellery gold prices have slumped to between 88 yuan (US$10.60) and 90 yuan (US$10.80) per gram from around 105 yuan (US$12.70) per gram at the beginning of this year.
Wang also attributed the slight gold demand decrease in the three quarters to two one-week holidays at Labour Day and National Day.
"The holidays prompted millions of people to travel and reduced their income available for other discretionary purchases, especially for gold jewellery," Wang said in a telephone interview with China Daily.
Wang forecast that total gold demand this year will not fluctuate from that in 1999.
The gold demand on the Chinese mainland was 205 tons last year, according to the council sources.
The domestic gold mining sector has been striving to produce more to satisfy demand for the precious metal, which is still a strong symbol of wealth for most Chinese.
The sector aims to produce 175 tons of gold this year, compared with 169.1 tons in 1999, the administration sources said.
In September, the national gold output amounted to 16.9 tons, the administration said.
The sector reported a robust increase in profits during the first three quarters.
The administration said the sector's profits in the period surged by 31.6 per cent to 750 million yuan (US$90.4 million) from the same period of last year.
The sector is aiming for a total profit of 1 billion yuan (US$120 million) this year.
For the first nine months of this year, global gold demand decreased by 3 per cent year-on-year to 2,391.6 tons, said the council, which is an international organization formed and funded by world leading gold mining companies to increase the demand for gold.
Gold investment demand during the period decreased by 27 per cent year-on-year to 277.3 tons.
Source: Chinadaily
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