SHANGHAI: China's demand for gold bars fell nearly 44% in the first quarter of 2014 from year ago, even as total gold consumption edged up about 0.8% during this period, the China Gold Association said on Wednesday.
Total gold consumption was 322.99 tonnes in the January to March period, up 2.45 tonnes from year ago.
Out of this total, gold jewellery purchases jumped 30.2% from year ago to 232.53 tonnes, but consumption of gold bars dropped 43.56% to 67.95 tonnes, the association said in a statement on its website.
The slump in demand for gold bars, commonly used as either gifts or for investment, comes as a fall in the price of gold hurt confidence amongst investors, Song Xin, president of the association, was quoted as saying in a report by the state news agency Xinhua.
Analysts cited by Xinhua said a crackdown on corruption launched by Beijing and stricter rules on the types of gifts government officials can receive has also hurt demand for gold bars.
China's total gold production in the first quarter rose 5.88% from year ago to 79.147 tonnes, the association said.
The World Gold Council expects China's gold demand to maintain a growth rate of between 20-25% in the next four years.
China's gold purchases via main conduit Hong Kong fell to a four-month low of 85.128 tonnes in March as a weaker yuan and domestic prices below the global benchmark kept banks from importing.
Lower imports from the world's top consumer of the metal, which have been a stabilising factor as gold prices fell over the past year, could add pressure on bullion as demand from the second-biggest buyer India has also taken a hit from tighter import rules. – Reuters
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