High Gold price slows Gold demand in China – Commerzbank
The Gold price is approaching its all-time high of $2,758 per troy ounce again, Commerzbank’s commodity analyst Carsten Fritsch notes.
Near all-time high again
“There is further evidence that the high price level is having a visible dampening effect on Gold demand in China. According to data from the China Gold Association, Chinese Gold demand in the first three quarters was down 11% year-on-year at 742 tons. Jewellery demand suffered particularly, falling 27.5% to 400 tons. By contrast, demand for bars and coins rose 27% to 283 tons.”
“This reflects demand for Gold as a safe haven and as a store of value. However, this was not nearly enough to compensate for the weakness in price- and cyclical-sensitive jewellery demand. Using the available data, Bloomberg has calculated that demand in the third quarter was down 22%.”
“Here, too, the decline in jewellery demand was disproportionately high at 29%. In addition, demand for bars and coins was also 9% lower than in the previous year. Thus, traditional demand for Gold is currently creating a headwind rather than a tailwind, which is likely to limit the further upside potential for the Gold price.”
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FXStreet Insights Team
FXStreet
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