Gold demand in China shrank for a third quarter as slumping prices failed to boost the purchases of bars, coins and jewelry in the world’s biggest user and officials pressed on with a nationwide anti-graft campaign.
Buying by Asia’s largest economy tumbled 37 percent to 182.7 metric tons in the three months to September from the same period in 2013 as last year’s price-driven surge in demand wasn’t repeated, the World Gold Council said in a report today. India was the only Asian economy tracked by the producer-funded group that bought more bullion than China as usage across the biggest consuming region contracted 15 percent to 473.4 tons.
An anti-graft drive in China this year hurt demand for luxury goods including bullion, while volatility that sank to a four-year low damped interest in the metal as an alternative investment. Banks including Goldman Sachs Group Inc. expect prices to extend losses, in part as the buying frenzy that accompanied gold’s drop into a bear market in April 2013 hasn’t been sustained. China surpassed India as the world’s largest gold user last year as prices retreated 28 percent.
“The scale of 2013’s exceptional buying continued to overshadow the market,” the London-based council said in the quarterly report that surveys global demand patterns. “The quiet environment provided China’s notoriously price-savvy investors with a further reason to stay out of the market.”