May 16 (Bloomberg) -- China’s gold demand jumped to a record in the first quarter as sentiment regarding the country’s economy underpinned consumption during the Lunar New Year, according to a report today by the World Gold Council.
Consumption reached 294.3 metric tons in the first three months, up 20 percent from a year earlier, the council said. Purchases of bars and coins grew at a faster pace than jewelry consumption and more than doubled the five-year quarterly average, the report said.
Global demand fell 13 percent to 963 tons in the quarter from a year earlier, the group said. Prices that rallied as much as sevenfold in the past 12 years entered a bear market last month as inflation failed to accelerate and as equities climbed on optimism that the U.S. will lead a global economic recovery.
The record consumption “was more pronounced due to a renewed confidence in China’s economic prospects and the removal of uncertainty created by the transfer of Chinese leadership during the closing months of 2012,” according to the report.
“Chinese investors, discouraged by the weak domestic stock market, increasingly relied on gold to fulfill their investment needs,” the industry group said. “The announcement in February of impending controls to be placed on the property market further emphasize gold’s investment properties going forward.”
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