Gold demand in China, the second- largest user after India last year, may expand 13% to 870 metric tons in 2012, the World Gold Council said, dropping a forecast for consumption to reach as much as 1,000 tons.
Jewelry demand may expand 7.7% to 550 tons, slower than the 13% growth last year, Albert Cheng, Far East managing director at the producer-funded group, said in an interview. Demand for bars and coins may gain 24% to 320 tons, lower than the 38% climb last year, he said.
Cash gold slumped for a fourth month in May in the worst run in 13 years as Europe's debt crisis drove investors to seek the dollar as a haven over the precious metal. Gold sales in China in the second quarter were slower than expected as local consumers usually refrain from buying when a rally stalls, said Cheng, who'd made the 1,000-ton prediction in May.
"From our talk to the industry people, we gathered that the Europe's debt crisis has led to a firmer U.S. dollar, which in turn suppressed the investors' willingness to buy gold," Cheng said in Beijing yesterday. "Gold jewelry is also discretionary consumption, so consumers feel they can wait.". . .View Full Article