China's consumer demand for gold rose 8 percent year on year to 282.4 tons in the first quarter of 2017, compared with an 18 percent drop in global demand due to a slower pace of central bank buying and a previous high base, the World Gold Council said yesterday.
China's investment in gold bars and coins jumped 30 percent to 105.9 tons in the first quarter, the fourth-highest on record, while jewelry demand fell 2 percent year on year.
Global demand for bars and coins rose 9 percent to 289.8 tons in the same period, said the WGC in a report.
Chinese investors reignited their passion for bullion in the past two quarters, as "concern over the weakness of the yuan lingers, outlook for the property market is gloomy, and the stock market looks weary," said Roland Wang, WGC's managing director for China.
"Gold was one of the few investment options for Chinese investors under the circumstances," Wang added.
Global central banks bought 76.3 tons in the quarter, down from 104.1 tons in the same period of last year, with China, one of the biggest buyers apart from Russia and India, said Wang.
China's premium of the precious metal rose to an average of US per ounce in the fourth quarter of 2016, and remained high in the first three months of this year.
"Demand will be further supported by the launch of new products from banks on mobile applications, which are making gold more accessible to China's retail investors," the report said.
The bullion price rose 9 percent in the first quarter of 2017, compared with a 10 percent quarterly gain a year earlier. Geopolitical concerns such as the upcoming elections in France will bring uncertainties to the price in the coming quarters, WGC said.