Tags: Chinese | Gold | Demand

WGC: Chinese Gold Demand May Rise 10 Percent in 2011

Monday, 19 Sep 2011 01:31 PM

Chinese gold demand could rise 10 percent, or around 70 tonnes, this year as consumers choose the metal as a form of wealth protection, the World Gold Council said on Monday.

China's gold demand stood at around 706 tonnes last year, according to the WGC, but burgeoning demand for the precious metal has the scope to lift that significantly.

"If you look at gold investment and jewellery demand, that could increase by 10 percent," the WGC's Far East managing director Albert Cheng told Reuters on the sidelines of the London Bullion Market Association annual conference.

"We are looking at about 10 percent, that's about 70 tonnes. That is not an insignificant figure," he said. "I never want to forecast those kinds of things, but a 10 percent overall (rise in) gold demand in China is not impossible for this year."

With the value of traditional investments like stocks and property currently volatile, Chinese investors are choosing gold as a store of wealth, Cheng said.

Two years ago, the WGC forecast that Chinese gold demand could double in the following decade. China is currently the world's second largest consumer of gold behind India, with the two markets accounting for a huge slice of bullion offtake.

Record-high gold prices, which peaked at above $1,920 an ounce earlier this month, have done little to dampen buying.

"India and China in the second quarter (of 2011) accounted for 54 percent of worldwide consumption. So any percentage increase in going to be mindblowing," Cheng said.

Any increase in Chinese demand is likely to have a significant impact on its gold imports, which stood at 240 tonnes last year.

Chinese gold miners have struggled to keep up with domestic demand, despite the fact that China is the world's biggest primary gold producer, with output of 351 tonnes last year, according to metals consultancy GFMS.

"Demand in the first half has been huge and local (production) cannot deal with demand," said Cheng. "The gap needs to be imported."

Metals consultancy GFMS said last week that soaring demand from China and India was behind a 7.5 percent rise in gold jewellery consumption in the first half, with buying elsewhere in the world mainly falling.

Chinese jewellery demand rose nearly 40 tonnes in that period, it said, while its consumption of gold bars also surged.

© 2017 Thomson/Reuters. All rights reserved.

 
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Chinese gold demand could rise 10 percent, or around 70 tonnes, this year as consumers choose the metal as a form of wealth protection, the World Gold Council said on Monday. China's gold demand stood at around 706 tonnes last year, according to the WGC, but burgeoning...
Chinese,Gold,Demand
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2011-31-19
Monday, 19 Sep 2011 01:31 PM
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