KUALA LUMPUR, June 12 (Bernama) -- Selected blue-chip counters trading at attractive valuations helped Bursa Malaysia close higher on Friday, despite cautious market sentiment driven by developments in West Asia, volatility in crude oil prices and uncertainty over the global interest rate outlook. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 4.10 points or 0.24 per cent to 1,683.63 compared with Thursday's close of 1,679.53. The key index opened 5.34 points stronger at 1,684.87 earlier today and moved between 1,679.72 and 1,685.39 throughout the session. Market breadth was negative, with losers leading gainers 533 to 479, while 561 counters were unchanged, 1,130 untraded and 33 suspended. Turnover fell to 2.79 billion units worth RM2.31 billion from 3.32 billion units worth RM2.88 billion yesterday.
China's gold consumption fell by 5.61% in the first half of 2024 compared to the same period last year, as high prices reduced the appeal of gold jewellery, according to data from the Gold Association.
Key Insights:
Overall Consumption:
- China consumed 523.75 metric tonnes of gold from January to June 2024.
- The decline is attributed primarily to reduced demand for gold jewellery.
Jewellery Demand:
- Gold jewellery consumption, accounting for 51.6% of the total, dropped by 26.68% to 270.02 tonnes.
- High prices have increased operational risks for gold processing and sales enterprises, leading to decreased purchases and processing volumes.
Gold Prices:
- The most-traded gold futures contract on the Shanghai Futures Exchange hit a record high of 588.28 yuan (US$81.11) per gramme on April 15, marking a 21.7% increase.
- The contract saw a 14.1% rise in the first half of 2024.
Central Bank Purchases:
- China's central bank refrained from gold purchases for the second consecutive month in June, maintaining gold reserves at 2,264.33 tonnes.
Investment Demand:
- In contrast to jewellery, demand for gold bars and coins surged by 46.02% to 213.64 tonnes, making up 40.8% of the total consumption.
- Investors favored gold as a safe-haven asset amid ongoing geopolitical conflicts and a sluggish global economic recovery.
Domestic Gold Output:
- Gold output from domestically produced raw materials rose by 0.58% to 179.63 tonnes.
- Total gold output, including imported raw materials, increased by 3.14% year-on-year to 251.66 tonnes.
- The modest output increase is due to dwindling easily mined resources in old mines and challenges in constructing new ones, alongside stricter environmental and safety regulations.
Implications:
- The significant drop in jewellery consumption highlights the impact of high gold prices on consumer behavior.
- The shift towards investment in gold bars and coins underscores the growing demand for safe-haven assets in uncertain times.
- The stability of gold reserves and moderate increase in domestic production reflect China's cautious approach in managing its gold resources.
The data provides a comprehensive view of China's gold market dynamics in the first half of 2024, highlighting the interplay between prices, consumer demand, and production challenges.
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