Less buying and dull sentiment dim gold demand

CHINA'S demand for gold dimmed in the third quarter amid a reduction in jewelry buying and negative investment sentiment, and helped pulled down the global demand by 12 percent from a record a year earlier, the World Gold Council said.

The Chinese demand for the bullion shed 8 percent annually to 185.1 tons in the third quarter as jewelry purchases were cut by 6 percent and investment fell 12 percent, the WGC said in its quarterly outlook yesterday.

"The slowing of China's economy had a negative impact on consumer sentiment, which is noticeable among the middle classes whose purchases of 18-carat gold jewelry declined," the WGC said.

It added that Chinese investors prefer to buy gold when prices are rising in hopes of making a profit when they sell. But gold prices have been fluctuating which hit investment sentiment.

The WGC expects a recovery in Chinese demand in the fourth quarter on market speculation that China's new political leadership may unveil economic stimulus measures and the approach of the holiday gifts season.

Although consumption in India remained above China's for a second straight quarter, the WGC still expects China to become the biggest market this year.

Global gold demand slipped to 1,085 tons in the quarter from 1,224 tons a year earlier.

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