Gold recently hit a new record price of $2,600 per troy ounce, signaling potential exhaustion in the market’s upward momentum. According to Commerzbank’s commodity expert, Barbara Lambrecht, the surge in gold prices may be affecting demand, particularly in China.
Record Gold Prices Amid Weakened Demand
Gold reached an all-time high of $2,600 per troy ounce, largely driven by the U.S. Federal Reserve’s aggressive interest rate moves. However, this record-breaking price has led to noticeable changes in global demand, especially in China, where gold imports have drastically reduced.
China’s Declining Gold Imports
In July, China’s gold demand imports fell to just 44.6 tons—the lowest in two years. This sharp decline follows a significant drop in the previous month, showcasing weakening demand in one of the world’s largest gold-consuming markets. Even though China received new gold import quotas for its banks in August, the overall purchasing interest remains subdued.
Key Factors Impacting Demand
The reduced demand for gold in China is driven by a few critical factors. First, jewelry demand has significantly weakened, as consumers are discouraged by the high prices. On the other hand, investment demand has stayed relatively stable. However, the absence of gold purchases by the Chinese central bank in August indicates that imports from Hong Kong, China’s primary gold supplier, are expected to remain low.
As China’s gold demand continues to weaken, it will be crucial to monitor how this impacts global gold markets. For regular updates on gold market trends, check out our daily gold updates. For more in-depth insights on gold investments and market movements, visit our main site.
