 "Lower Chinese gold demand is 'new normal', says WGC")
Chinese appetite for gold has dropped after last year's buying frenzy despite lower prices, an industry body said on Thursday, cutting its annual demand forecast for the top consumer for a second time in three months.
The World Gold Council (WGC) said it expected Chinese demand of 850-950 tonne this year, down from a previous estimate of 900-1,000 tonne. Early in the year, the London-based group had said Chinese appetite could reach 1,100 tonne.
China consumed a record 1,065 tonne last year as a 28% tumble in gold prices after a 12-year rally unleashed a wave of buying.
"The Chinese gold market going forward is going to be a steady market as we are back to the new normal," Albert Cheng, managing director of WGC's far east region, told Reuters.
The firm's demand report on Thursday showed that Chinese consumption fell 37% year-on-year in the third quarter of 2014 to 183 tonne. Global gold demand dropped to its lowest in nearly five years in the third quarter.
At about 640 tonne, China's demand so far this year is higher than India - another major gold consumer - although only by about 20 tonne.
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Chinese demand for jewellery, bars and coins in the fourth quarter has been unremarkable except for a brief spike during the Golden Week holiday in October, the report said.
Chinese reluctance to purchase gold was underlined earlier this month when buying remained muted despite prices dropping to their lowest in 4-1/2 years.
Consumers are not sure prices have bottomed-out, WGC's Cheng said, adding that China also has adequate supply.
"Last year, China imported more than their demand. Some of that is sitting in inventory and some is being used for financing deals," said Cheng.
"As that unwinds, it is being used in the consumer market, and there is no need for fresh imports into China."
China imported a record 1,158 tonne from main conduit Hong Kong alone last year.
It could have locked up as much as 1,000 tonnes of gold in financing deals over the last few years, a WGC report showed in April.
Chinese firms have been using various commodities to obtain credit after restrictions on traditional sources. Copper, iron ore, rubber, soybeans have all been used alongside gold.