DBS Group Research has reported that China's credit demand is expected to remain weak in July, with new loans around RMB 10.8 billion and M2 growth at 8% year-on-year. This reflects a cautious borrowing stance among both corporations and households, leading to a reduction in long-term lending and increased mortgage prepayments.
Impact on the Gold Market
A weak credit demand in China may signal subdued economic growth, often prompting investors to turn to safe-haven assets like gold. In times of uncertainty, gold is seen as a valuable asset, potentially increasing its demand and price.
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