Demand for gold in China fell last month — World Gold Council

The World Gold Council (WGC) reports that demand for the precious metal in China cooled last month.

According to the association, 99 tons of the yellow metal were withdrawn from the Shanghai Gold Exchange in May. That amount shrank by 35% compared to April. Weak gold consumption in the second quarter and early third quarter usually suppresses re-stocking activities of manufacturers. The month-on-month fall was also driven by cooling bullion investment momentum, stemming from trade talks between the US and China and declining gold prices. 

At the same time, the amount of the yellow metal withdrawn from the Shanghai exchange rose 21% compared to May last year, yet was below the 10-year average. Record gold prices weighed on jewelry sales and wholesale gold demand in China, WGC says. 

Besides, Chinese gold-backed exchange-traded funds (ETFs) posted outflows of 3.3 billion yuan ($461 million) last month. The main driver behind it was stronger investor interest in risk assets amid easing trade tensions, WGC notes.