High gold price slows down gold demand in China – Commerzbank

The gold price is again approaching its all-time high of $2,758 per troy ounce, notes Commerzbank’s commodities analyst Carsten Fritsch.

Almost a record high again

“There are further indications that the high price level has a visible dampening effect on the demand for gold in China. Demand for Chinese gold fell 11% year-on-year to 742 tonnes in the first three quarters, according to data from the China Gold Association. Demand for jewelry in particular suffered, falling by 27.5% to 400 tons. In contrast, demand for bars and coins increased by 27% to 283 tons.”

“This reflects the demand for gold as a safe haven and store of value. However, this was far from sufficient to compensate for the weakness in price and cyclical demand for jewelry. Based on available data, Bloomberg calculates that demand fell by 22% in the third quarter.”

“Here too, the decline in demand for jewelry was disproportionately high at 29%. In addition, demand for bars and coins was also 9% lower than last year. Traditional demand for gold is therefore currently creating a headwind rather than a tailwind, which is likely to limit further upside potential for the gold price.”