In China's jewellery hub, gold loses sparkle for wary buyers

Tue Dec 22, 2015 8:30pm EST
 
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* China's gold demand poised to dip for a second year in 2015

* Retailers in China's jewellery hub warn of more declines

* Chinese consumers lose confidence in gold as an investment

* Weakness comes as demand in No.2 consumer India also soft

By James Pomfret and A. Ananthalakshmi

SHENZHEN/SINGAPORE, Dec 23 (Reuters) - As Chinese consumers cut back on gold purchases for a second year in a row, nowhere is the slowdown being felt more than in the country's once-bustling jewellery manufacturing and retail hub of Shuibei.

Gold demand has taken a hit from a slowing economy and Beijing's anti-corruption drive, which has cut demand for luxury products, but there are fears of a more protracted loss of confidence among buyers in the world's top consumer of the precious metal.

With buying in No.2 consumer India also soft, another year of weak Chinese demand would help pile more pressure on global gold prices languishing near six-year lows.

The hundreds of jewellery stores in Shuibei, a district of Shenzhen only a short hop over the border from Hong Kong, have seen business take a downturn since a buying boom peaked in 2013 as once-voracious Chinese consumers turn cautious.   Continued...