World’s Top Gold Market Freezes as Chinese Shoppers Stay Away – by Annie Lee and Jinshan Hong (Bloomberg/Yahoo – March 31, 2020)

https://finance.yahoo.com/

(Bloomberg) — The coronavirus pandemic has frozen the Chinese gold market, torpedoing demand at a time when investors elsewhere in the world are clamoring for the safety of bullion.

China is the biggest buyer of gold bars, coins and jewelry, but the national shutdown to contain the virus has emptied malls, while the premium charged to buy the metal in China has evaporated. It leaves the industry staring down a long road to recovery, even as Beijing tries to jump-start broader consumption with a campaign to get shoppers out and about.

The market’s struggles in China may present a headwind for prices, which last month topped $1,700 an ounce for the first time in seven years. The traditional haven also faces a drag from slower retail consumption in India, Europe and the U.S., as well as Russia’s surprise decision to halt purchases by its central bank. Last year, Chinese consumers accounted for about a fifth of total gold demand of 4,356 tons, according to the World Gold Council.

“Domestic demand for gold will recover very slowly,” said Zhang Yongtao, chief executive officer of the China Gold Association. “Even after processors resume production, one major issue is that there are no orders,” he said.

China’s retail sales of gold, silver and jewelry plunged 41% in the first two months of the year. Zhang estimated that the amount of gold jewelry sold in the first quarter will have fallen by at least half, setting up a significant decline for the whole year.

For the rest of this article: https://finance.yahoo.com/news/world-top-gold-market-freezes-004418414.html

Comments are closed.