According to the Chinese Gold & Silver Exchange Society, demand for gold in mainland China may soon touch or even exceed records after financial-market rout and the yuan devaluation bolstered the metal's attractiveness.
The society also noted higher sales at jewelers in Hong Kong.
Buying in mainland China, which competes with India as the world’s largest consumer, gained momentum after the stock-market rout this year and August’s surprise devaluation, according to Haywood Cheung, chairman of the supervisory committee at the century-old bullion exchange. Demand in Hong Kong may rise 25 percent over the next six months after the dull first half of the year, he said in an interview.
Gold prices have been pushed down in 2015 following two years of losses on expectations of higher U.S. interest rates. The decline in 2013, when bullion sank 28 percent, drove increased buying across Asia, and 2015 is shaping up well and may eclipse that year’s total, according to Cheung. The Chinese currency was devalued in the third quarter to boost the nation’s competitiveness, and officials have also acted to restrain a stock-market turmoil.
“Investors
still prefer gold as they don’t have many alternatives in terms of
investment choices,” Cheung said on Friday, citing estimates by the
society’s members, which include the world’s largest listed jewelry
chain Chow Tai Fook Jewellery Group Ltd. and Chow Sang Sang Holdings
International Ltd.
He added that there is a general sentiment that there is less price uncertainty now.
Market players are estimating possibilities for the first rise in U.S. rates since 2006, with Fed officials set to meet this week and again in December.
Data from the World Gold Council issued in August showed that consumer demand in China totaled 497.3 tons in the first half of 2015 and was 973.6 metric tons last year. In Hong Kong, demand was 61.4 tons in 2014 and 24.8 tons between January and June, data signaled. In February 2014, the producer-funded group estimated Chinese consumer demand at 1,066 tons.
