|Gold loses its luster as demand falls 0.5%
THE demand for gold on China's mainland dropped for the first time in a decade last year as the economy slowed and demand fell despite growth in investor sentiment, an industry report showed yesterday.
Total gold demand on the mainland in 2012 dipped 0.5 percent to 776.1 tons, the World Gold Council report said.
Gold bar and coin investments inched up to 265.5 tons from 264.7 tons a year ago while purchases for jewelry dropped 1 percent to 510.6 tons.
In China as a whole, including Hong Kong and Taiwan, demand dropped less than 1 percent to 817.5 tons as falling demand for jewelry overshadowed growth in investment appetite.
However, the report said: "The signs of economic improvement suggest positive signs for gold demand in China this year, indicating a steady firming rather than strong growth."
In the fourth quarter last year, jewelry demand in the mainland was up 1 percent to 103.7 tons and investment demand also grew 2 percent.
Gold bars and coins are selling at 336.5 yuan (US$54) per gram on China's mainland, according to the Shanghai Gold Exchange. Jewelers charge a premium of around 70 yuan per gram.
There was a 9 percent overall drop in worldwide gold demand last year, the first time in three years.
China is the world's second largest gold buyer behind India and largest producer after output rose 11.7 percent to 403.05 tons last year, according to the China Gold Association.