GOLD consumption in China fell for the first time in three years in 2019, figures released by its industry association showed Tuesday, as high prices and an economic slowdown hit buying in the world’s biggest market for the metal.

China consumed 1,002.8 tons of gold in 2019, down 12.9 percent year on year, the China Gold Association said in a statement on its website.

The drop was due to downward pressure on the Chinese economy and rising prices for the metal in the second half of last year, the association said.

China’s economic growth cooled to its weakest in nearly 30 years in 2019 during a bruising trade war with the United States, data showed Jan. 17.

Spot gold prices climbed by 18.3 percent in the same year as the trade stand-off led to policy easing by major central banks, reducing the opportunity cost of holding non-yielding bullion.

Prices are currently around US$1,555 an ounce, after soaring to a near seven-year high of US$1,610.90 earlier this month.

The high price “has led investors in solid gold to adopt a wait-and-see stance, and sales of gold bars by key firms and commercial banks have also fallen sharply,” the association said.

Gold jewelry consumption in China was down 8.2 percent to 676.23 tons in 2019, while that of gold bars and coins tumbled by 27 percent to 225.8 tons.

“The Chinese economy is not getting better, thus spending sentiment has been souring,” said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.

“The jewelry sector continues shifting toward products carrying less gold content, because they are cheaper to consumers, have better designs, and offer higher profit margin to sellers.”

China, also the largest producer of mined gold in the world, saw its domestic output of the metal fall last year by 5.2 percent to 380.2 tons, sliding for a third straight year as resources depleted. Raw material imports rose 6.6 percent, the association said.  (SD-Agencies)