Gold exchange traded funds may begin to dull as China cuts demand for gold jewelry and India consumption is expected to hit a five-year low on import restrictions.
COMEX gold futures were relatively unchanged Thursday, trading around $1,315 per ounce.
According to the World Gold Council, total demand for gold was 964 metric tons in April to June, down 16% compared to 1,148 tons consumed during the same period year-over-year, the Wall Street Journal reports.
Demand for gold used in jewelry experienced a significant drop off, falling almost a third to 510 tons in the second quarter year-over-year.
Chinese demand plummeted 52% to 192.5 metric tons in the three months through June year-over-year, Bloomberg reports.
“The data confirms our view that Chinese gold demand will stay relatively weak compared with 2013, which only serves to drag gold prices lower into the second half,” Barnabas Gan, an economist at Oversea-Chinese Banking Corp., said in the Bloomberg article.
Additionally, a crack down on bribery and corruption has also “strongly discouraged purchases of bars and coins, along with other luxury-gift items,” the council said.