China 2020 gold consumption drops due to COVID-19, says industry association

BEIJING: China's gold consumption fell by almost a fifth in 2020, the China Gold Association said on Monday, as the coronavirus outbreak choked gold processing and dented retail consumption.

China gold consumption in 2020 fell 18.13% from a year ago to 820.98 tonnes, the association said on its website, with the consumption of jewellery down 27.45% at 490.58 tonnes and industrial and other gold consumption 16.81% lower at 83.81 tonnes.

However, top gold user China's consumption of 2020 gold bars and gold coins rose 9.21% to 246.59 tonnes year-on-year.

Some gold retailers have opened up new markets online and had outstanding sales, but due to a low online sales base they could not compensate for the decline in store sales hurt by the COVID-19 pandemic, the association said.

A looser monetary policy and volatility in gold prices increased private investors' interest in gold, the association added.

Benchmark spot gold prices surged 25% in 2020, having hit an all-time high of above $2,000 an ounce in August.

In the second half of the year, the consumption of gold bars and gold coins soared 50.91% year-on-year reversing the consumption trend of gold bars and gold coins throughout the year.

In the first half of 2020, the national actual consumption of gold was 323.29 tonnes, a decrease of 38.25% compared with the same period in 2019 and the consumption of gold bars and gold coins fell 32.12% to 76.98 tonnes over the same period.

Gold output fell 3.91% to 365.34 tonnes last year, according to the association.