| VANCOUVER, June 19
VANCOUVER, June 19 Private sector gold demand in
China, which last year surpassed India to become the world's
biggest consumer of the yellow metal, will be flat to slightly
lower this year, a China Gold Association official said on
Demand for gold jewelry in China remains strong but interest
in gold bar investments is soft compared with last year because
of concerns about further weakness in the gold price, said Xin
Song, president of the China Gold Association.
Although gold gained nearly 3 percent on Thursday to rise
above $1,310 an ounce on the back of a drop in the dollar,
bullion prices are still down 22 percent since the start of last
year and a third below their all-time peak in September 2011.
"Demand will be almost the same as last year, or a little
bit less ... But for sure it will be over 1,000 tonnes," said
Song, who was in Vancouver for an industry conference.
Chinese gold demand soared 41 percent last year to 1,176
tonnes, according to association figures. But in the first
quarter of 2014, the increase in demand slowed to 0.8 percent to
323 tonnes, as a 44 percent slump in bar demand offset a 30
percent rise in jewelry demand. Gold bars are commonly used as
either gifts or for investment.
Figures for second-quarter China gold demand will be
published next month, Song said.
Robust Chinese demand has helped provide a floor for gold
prices, which have been under pressure as a shift in U.S.
Federal Reserve policy toward curbing monetary stimulus has
reduced the appeal of gold as a safe haven and as gold-backed
exchange-traded funds have been hit by big outflows.
China's rising demand has helped counter a drop in demand in
India, where a high current account deficit has forced the
government to impose curbs on gold imports.
(Editing by Matthew Lewis)