China’s consumption of gold in the first half of 2024 decreased by 5.61 percent compared to the same period last year, according to data released by the Gold Association on Sunday. The world’s largest gold consumer utilized 523.75 tonnes of the precious metal from January to June, with purchases of gold jewellery, comprising 51.6 percent of total consumption, plummeting by 26.68 percent to 270.02 tonnes year-on-year.
The Gold Association attributed the decline primarily to high gold prices, which have heightened operational risks for processing and sales enterprises. Wholesale and retail purchases dwindled, significantly reducing jewellery processing volumes. In contrast, demand for gold bars and coins surged by 46.02 percent to 213.64 tonnes, accounting for 40.8 percent of the total consumption, driven by renewed investor interest amid geopolitical tensions and a sluggish global economic recovery.
Meanwhile, China’s domestic gold output increased slightly by 0.58 percent year-on-year to 179.63 tonnes in the first half of 2024. However, this growth fell short of expectations due to dwindling resources in older mines and challenges in launching new mining projects amid stricter environmental and safety regulations. Gold production from imported raw materials rose by 10.14 percent to 72.03 tonnes, bringing China’s total gold output for the period to 251.66 tonnes, a 3.14 percent increase compared to the previous year.
Furthermore, China refrained from adding to its gold reserves for the second consecutive month in June, when its total gold holdings stood at 2,264.33 tonnes. Analysts pointed to continued high prices as a deterrent for central bank purchases.
The most-traded gold futures contract on the Shanghai Futures Exchange surged by 21.7 percent to a record high of 588.28 yuan ($108.80) per gram on April 15, contributing to the overall decline in consumer demand for gold jewellery and central bank purchases.
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