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China 2021 Gold Demand seen Reverting to Pre-Pandemic Levels

SHANGHAI, April 29 (Reuters) - China’s 2021 gold demand will see annual growth and will revert to pre-pandemic levels if there are no dramatic changes to the global economic and geo-political situation, a World Gold Council (WGC) official said on Thursday.

“For China we had better first quarter growth even compared to 2019 ... If things are stable, we are sure China can stay in such a positive growth,” said Wang Lixin, WGC managing director in China, adding that the jewellery and investment segments would drive China’s gold demand.

“Chinese consumers are more confident today than even two years ago, before the pandemic. There was uncertainty over the trade war impact then.”

China, the world’s biggest gold consumer, saw consumer demand in the first quarter of 2021 rise to 286.4 tonnes from the previous quarter, the WGC said, a stark contrast from the trend of global gold demand which sank to a 13-year low.

“The booming jewellery demand was underpinned by three main drivers: Improving economic conditions, lower gold prices and sales spree related to holidays. At 191.1 tonnes, first quarter jewellery demand marked the highest first quarterly level since 2015,” said Wang, explaining that jewellery makes up over half of China’s gold demand.

China’s 2020 gold consumption and imports plunged due to the coronavirus outbreak.

But its appetite for the precious metal recovered in line with an economic rebound since the second half of last year. China’s March net gold imports via Hong Kong surged to their highest since December 2019 after new import quotas were issued by the central bank due to improved demand.

China has given commercial banks permission to import large amounts of gold into the country in efforts to support prices after months of declines, sources familiar with the matter said.

Spot gold surged to a record high of $2,072.50 in August. It was last down 0.4% at $1,774.2 per ounce on Thursday.

(Reporting by Emily Chow; editing by David Evans)

Source: Reuters

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