sponsored by Express Gold Refining
High Prices Impact Gold Demand in China
China’s bullion imports slowed last month as demand in the world’s largest gold market is being impacted by record high prices. The high prices, driven by geopolitical tensions and economic uncertainties, have started to weigh on consumption patterns.
In April 2024, net gold imports from Hong Kong to China dropped significantly, falling by 48% compared to previous months. This slowdown can be attributed to the sharp rise in gold prices, which have surpassed $2,400 per ounce. Despite the overall reduction in imports, China remains a significant player in the global gold market, continuing to influence global prices and trends due to its substantial demand for the precious metal.
Chinese households have shown strong investment interest in gold, with demand nearly reaching 1% of the country’s GDP. This surge in demand is largely driven by the search for safe-haven assets amid declining performance in other investment sectors like real estate and the stock market. Despite the high gold prices, Chinese consumers have continued to invest heavily in gold jewelry, coins, and bars, showcasing an atypical resilience to price increases.
In conclusion, while China’s bullion imports have slowed due to record prices, the country’s overall demand for gold remains robust, driven by both individual investors and central bank purchases. This continued strong demand highlights the complex dynamics of the global gold market and China’s critical role within it.
