Gold enthusiasm wanes in China
Gold demand in China - the world's biggest consumer - plunged by more than a fifth in the third quarter as record prices and a sluggish economy dented consumption, especially for jewelry.
Total demand fell by 22 percent to 218 tons in the three months ending in September, according to Bloomberg. Jewelry consumption tumbled 29 percent to 130 tons, while for bars and coins there was a 9 percent drop to 69 tons.
Gold prices have rallied by about a third this year, hitting a fresh peak last week, on increased purchases by central banks as well as sustained haven demand from investors.
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In other news, China's central bank launched a new lending tool yesterday to inject more liquidity into the market and support credit flow in the banking system, ahead of the expiration of 2.9 trillion yuan (HK$3.16 trillion) in loans at the end of the year.
The People's Bank of China said in a statement it had activated the open market outright reverse repo operations facility to "maintain a reasonable abundance of liquidity in the banking system and further enrich the central bank's policy toolbox."
Some 2.9 trillion yuan in medium-term loans are due to mature between now and the end of December, which will make it harder for banks to finance investment and revive flagging growth in the world's second-largest economy.
UBS believes China's annual economic growth can be stabilized at 5 percent with ample stimulus.
Source: https://www.thestandard.com.hk/