2014 Why Gold Consumption Was Hurt In The First Half Of The Year?

Here world clothing shoes The Xiaobian of the hat net tells us why China's gold consumption was "very hurt" in the first half of the year.

The change of gold demand and consumption in China is affected by the decline of demand in the international gold market. The change of demand in China's gold market in 2014 may follow the trend of declining demand in the world gold market. On the other hand, the cost of gold lending dropped to 13 months low and continued to decline, which may mean that gold prices still have further decline. If the international gold price falls below 1200 US dollars per ounce, the production capacity of domestic gold producers will further decline.

According to the latest statistics of China Gold Association, China's gold consumption reached 569.45 tons in the first half of 2014, compared with the same period last year, consumption decreased by 136.91 tons, down 19.38% from the same period last year. The data poured cold water on the booming domestic gold market. What caused the data to deteriorate?

　 　 gold Consumption advance overdraft

In April 12, 2013, influenced by the trend of world economy and the possible withdrawal of quantitative easing policy by the United States, international gold prices suddenly plunged, and spot gold prices began to collapse. The sudden plunge in gold prices strongly stimulated the consumer market of physical gold. The outbreak of the gold rush only in April 2013 prompted China to spend 706.36 tons of gold, of which gold bar consumption increased by 86.5%.

The latest statistics of China Gold Association show that in the first half of 2014, China's gold jewelry 426.17 tons, an increase of 11.02% over the same period, and 105.58 tons of gold bullion, down 62.13% compared with the same period last year. It is not hard to see that the Chinese are still buying gold, but not as much as in 2013. After two slump in April 2013 and June, gold consumption was evidently overdrawn in advance. However, domestic demand for gold jewelry was still strong, and the interest in asset allocation by investing gold bars as a way to resist risks has weakened.

　 The hardship March of gold enterprises

With the fall in gold prices, lower prices bring benefits to consumers in buying gold. However, in the past year, although sales are booming, the real profits of the gold sales industry are shrinking, showing the absolute value of profits has increased, but the gross profit margin has declined.

The reason for this situation is: on the one hand, from the beginning of 2013, about 360 yuan / gram to the end of the year 240 yuan / gram, until this year in 240 yuan / gram ~270 yuan / gram hovering, the price difference is very big. On the other hand, a large number of gold sales enterprises have been developing discount and promotional activities for the purpose of sales volume, which has become the norm of gold jewelry sales nowadays, and they make up for the losses caused by the collapse of gold prices. The gold sales industry has entered the era of meager profits.

For the gold mining industry, the cost of mining and selling prices are upside down, and China's ore grade and gold reserves are uneven, while production costs are rising. The cost of turning every ton of ore into gold concentrate is more than 300 yuan. If the grade is 2 grams per ton, there will be little profit. Therefore, the low-grade ore can not be exploited at this stage. At present, gold mining is concentrated on high-grade ore, which has become a "helpless measure" for domestic gold mining enterprises.

The false chaos of domestic gold financing

According to statistics from the Hongkong census and Statistics Department, Hongkong's gold exports to China in June fell for the fourth consecutive month, down to 41 tons, the lowest level since January 2013.

According to the World Gold Council report, a large part of China's gold imports are used as collateral for corporate financing. At the end of June, China's National Audit Office found that 25 gold processing enterprises had invented the trade background since 2012, and accumulated 94 billion 400 million yuan in cross border and cross currency rolling loans. The difference was 900 million yuan. Therefore, the authenticity of China's total import gold in 2013 and the gold consumption data that exceeded 1000 tons in 2013 need to be re evaluated rationally. It is especially noteworthy that the National Audit Office disclosed only 25 gold processing enterprises. China's imports of gold will probably drop by 400 tons this year due to weaker demand and tighter financing regulation. China's gold import data and consumption data may have changed considerably compared with previous years, as data gradually cleared up.

The change of gold demand and consumption in China is affected by the decline of demand in the international gold market. The change of demand in China's gold market in 2014 may follow the trend of declining demand in the world gold market. On the other hand, the price of gold has fallen below 1300 U.S. dollars / ounce under the influence of the continuous decline in international gold prices, but the cost of gold borrowing has dropped to a low level of 13 months and has continued to decline. This may mean that gold prices are still falling further. If the international gold price falls below 1200 US dollars / ounce, the domestic gold production capacity will further decline. Perhaps the government's efforts to promote clean government and the campaign against corruption and China are in the stage of economic restructuring may be right. Gold consumption Demand has a certain degree of adverse effect.