Strong consumption power drives gold price to rise

2023-08-07 Editor : Li Yan ECNS App Download

An employee arranges gold ornaments at a jewelry shop in Renhuai, Guizhou province. (CHEN YONG/FOR CHINA DAILY)

Gold consumption was 554.88 tons in China during the first half of this year, seeing a 16.37 percent increase year-on-year, according to the latest data released by the China Gold Association.

China's economy has picked up and improved, and the overall national gold consumption has shown a rapid recovery trend, said The Paper.

The consumption of gold jewelry in H1 was 368.26 tons, an increase of 14.82 percent; consumption of gold bars and coins was 146.31 tons, up 30.12 percent year-on-year.

Due to the price of gold remaining at a high level, consumers are more inclined to buy light-gram products, and the sales growth of gram-weight pricing products is significantly higher than that of piece pricing products.

Thanks to the sustained and stable growth of residents' income and the increase in demand for hedging, physical gold investment consumption continues to grow rapidly, said a spokesman of the China Gold Association.

The economic recovery of China and continued gold purchases by the central bank have provided favorable conditions for a significant increase in gold consumption and, consequently, consumption power has increased, further boosting the demand for products such as gold, in addition to the need for hedging which has also boosted the consumption of investment gold, said Gao Wei, a manager at Shandong Zhaojin Gold and Silver Refinery Co Ltd.

It is also worth noting that domestic gold production showed an increase in the first half of the year. Domestic material gold production was 178.6 tons, an increase of 3.9 tons, up by 2.24 percent year-on-year.

In addition, imported gold materials produced 65.4 tons, up by 17.5 percent. When adding this portion of gold products to the total, the total production of gold was 244 tons, up by 5.93 percent year-on-year.

As the production of national gold enterprises returned to normal, the industry showed a stable and high-quality development trend, said spokesman of the China Gold Association.

Looking forward to the next half of this year, the industry generally believes that gold production and consumption will keep a positive trend.

"Gold prices are expected to continue to rise, and mining enterprises will further increase production capacity, driving a rise on gold production. On the consumers'end, a higher price will inhibit investment gold consumption, but, with the implementation of various policies and measures to expand domestic demand and promote consumption, the probability of gold consumption in the second half of the year will still achieve year-on-year growth," Gao said.


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