After the decline in bullion prices, Chinese consumers are picking up gold again, lifting the precious metals market and related exchange traded funds.
Over the past week, SPDR Gold Shares (NYSEArca: GLD) rose 0.5%, iShares Gold Trust (NYSEArca: IAU) added 0.6% and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) returned 0.6%.
COMEX gold futures were hovering around $1,212.1 per ounce Tuesday.
China Gold Association president Song Xin estimates that Chinese gold demand over the first quarter rose 1.1% year-over-year as the relatively low bullion prices attracted retail interest, notably in gold jewelry, reports Chuin-Wei Yap for the Wall Street Journal.
The market could be turning around after a decline in gold prices over the past year in response to a plunge in Chinese demand in 2014, a record surge in gold consumption in the previous year and the strengthening U.S. dollar.
Song also believes that China will maintain a steadily rising demand growth for the rest of the year after a 25% drop off in demand over 2014.
The China Gold Association believes the relatively lower price in gold is supporting jewelry demand in Asia. For instance, Chinese jewelry demand could rise 8% this year, Song added.