Buying Season
China's gold jewellery demand seen rising in Jan-Feb, says WGC's Ray Jiya
This story was originally published at 15:20 IST on 16 January 2025
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Informist, Thursday, Jan. 16, 2025
MUMBAI – Gold jewellery consumption demand in China is expected to see a seasonal rise because of the peak buying season during the Chinese New Year holiday from Jan. 28 to Feb. 4, according to Ray Jia, China research head of the World Gold Council. Investment buying in gold will likely continue to draw support from falling government bond yields and a weak local currency, driven by intensifying expectations of more rate cuts to boost the economy and concerns around rising US tariffs, Jiya said.
In December, a total of 122 tonnes of gold was withdrawn from the Shanghai Gold Exchange, up 24% from a month ago, Jia said in China's gold market report for December. The yellow metal prices diverged last month with gold prices falling 2% in dollars, but rising 0.1% on account of a 1?preciation of the Chinese currency against the dollar.
Gold prices in Chinese yuan rose by 28% in 2024, the biggest annual gain since 2009, and in dollars increased by 27%, the largest increase since 2010. "Spiking geopolitical risks around the globe and continued central bank gold purchases were the main drivers of the international gold price. A weakening Chinese yuan against the dollar bolstered the yuan gold price further," Jiya said.
Meanwhile, inflows into Chinese gold exchange-traded funds surged in December to $9.7 billion, the highest on record, Jia said. The total assets under management holdings rose 7.5 tonnes to reach a record level of 115 tonnes in December.
The People's Bank of China bought 10 tonnes of gold in December, the second straight month of purchases. Gold reserves with the Chinese central bank climbed to 2,280 tonnes, accounting for 5.5% of total foreign reserves.
The Chinese central bank bought 44 tonnes of gold in 2024, the lowest since 2022.
China's gold imports rose 36% on month to 108 tonnes in November, Jia said. "This is seasonal, given China's gold demand tends to rise ahead of the Chinese New Year holiday in late January or early February. However, due to subpar wholesale gold demand, imports were below their pre-COVID five-year average (124 tonnes) and 23% lower on year." End
US$1 = INR 86.54
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Sandeep Sinha
Edited by Saji George Titus
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