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In a year during which few statistics from China have brought good news, could the 37% year-on-year drop in consumer gold demand have a silver lining?
Demand for jewellery in China was down 39% year-on-year in the third quarter, while demand for bar and coin investment was down 30%, the World Gold Council (WGC) said in its Gold Demand Trends report last week.
As consumer preferences shifted from 18-carat gold to the 24-carat option, the WGC said that the government’s anti-corruption drive may be contributing to the trend.
The WGC expects demand to pick up during Chinese New Year in February but cautioned that the government’s crackdown on corruption is likely to prevent any exuberance.
The frugality drive has affected high-end tea and the luxury goods market, as well as gold, state media reports have said.
The government’s no-nonsense stance towards corruption has also been demonstrated by China’s membership of the Austria-based International Anti-Corruption Academy, the South China Morning Post reported this week.
The institute’s aim is to overcome shortcomings in knowledge and practice in the field of anti-corruption and to empower professionals for the challenges in the area.
Recent anti-corruption investigations in China uncovered 37kg of gold along with cash at the house of a Communist Party official, with state media reports describing the amount seized as “shocking”.
At the closed-door annual Economic Cooperation Work meeting next month, a chosen few will decide what the thrift drive will mean for China in 2015, as the country bids goodbye to the year of the Qingdao fraud.
editorial@metalbulletin.com