China's gold demand to stabilise in 2025, says WGC's China research head
This story was originally published at 15:56 IST on 6 December 2024
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MUMBAI – The volatility in gold demand from China could fall in 2025 on a potential stability in economic development and expectations of further stimulus measures by the country, said Ray Jia, research head of World Gold Council, China, in a report. With a likely weaker local currency, gold investment demand should be supported, Jia said.
"...gold purchasing announcements from the central bank, should they resume, will provide an additional tailwind to local investor appetite for gold. As such, we believe China's gold demand will stabilise in the coming year," Jia said. Investment in gold bars and coins is expected to remain healthy in 2025 because of increasing currency depreciation pressure and a high likelihood of lower interest rates.
Gold has been the best performing asset in China so far this year, surging 28% as of November-end. Domestic factors such as a depreciating Chinese yuan, strong investment momentum, including sizeable gold exchange-traded fund inflows, and active futures trading have contributed to the performance of China's gold price, Jia said.
The strong performance in gold prices alongside slowing economic growth dented affordability for gold jewellery consumers. However, when combined with declining yields, a volatile equity market and a weaker local currency, it has attracted gold investors, Jia said. China's total gold demand reached 741 tonnes, down 19% on year, during the first three quarters of 2024. However, demand remained above its five-year average due to strong investment flows. End
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Reported by Ashutosh Pati
Edited by Akul Nishant Akhoury
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