Short-term Outlook
WGC's Ray Jia sees firm demand for gold bars, coins in China
This story was originally published at 16:38 IST on 20 February 2025
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MUMBAI – The soaring gold prices may weigh on gold jewellery sales in China but the wholesale demand in the country is likely to remain stable in the short term due to continued investment demand for gold bars and coins, according to World Gold Council Research Head (China) Ray Jia.
"... judging from the surging attention consumers are paying to gold, there is a possibility that wholesale demand in the near term – driven mainly by investment purchases – may stay stable before it cools as Q2 (Apr-Jun), historically an off-season of gold consumption in China, approaches," Jia said.
Chinese gold exchange-traded funds witnessed outflows in January, he said. Gold ETFs saw an outflow of $399 million in value term last month, with the total assets under management holdings at 110 tonnes.
"... the outflow can be mainly attributed to profit-taking activities ahead of the Chinese New Year holiday to avoid additional volatilities from international markets while the local market is closed. Meanwhile, improving risk appetite amid the stronger-than-expected Q4 (Oct-Dec) and 2024 GDP data releases in the month may also have led to outflows from gold, the safe-haven asset," Jia said.
The People's Bank of China added 5 tonnes to its gold reserves, marking the third consecutive monthly gold purchase, Jia said. The central bank's total gold holdings rose to 2,285 tonnes. China imported 84 tonnes of gold in December, taking the Oct-Dec imports to 270 tonnes. In 2024, China imported 1,225 tonnes of gold, down 14% on year. "... we saw similar trends in China's gold consumption in 2024, which fell 10% compared to 2023, leading to the decrease in imports." End
US$1 = INR 86.66
Reported by Ashutosh Pati
Edited by Saji George Titus
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