China’s Gold Imports To Rise As Investment Demand Overtakes India
China’s investment demand in gold more than doubled in Q1 of this year overtaking India to become the world’s largest market for gold bars and coins according to the World Gold Council.
China produced 340 metric tons of gold in 2010 but consumed around 700 tons, leaving a shortfall of around 360 tons according to the Far East managing director at the council, Albert Cheng speaking yesterday, “With increasing demand in China we will have to rely on imports to fill the gap between demand and supply.”
China’s investment demand leapt 123% to 90.9 tones in the first quarter of 2011 compared to an 8% rise for India to 85.6 tons, the council said. The price of bullion climbed to a record $1,577.57 an ounce this month caused by investors looking for the safe haven that gold traditionally provides against rising inflation and the concerns of the strength of the global recovery.
Song Qing, a director at Lion Fund Management Co. said “Gold has taken on a new role in China amid concern about inflation.It is increasingly being seen as an asset allocation choice. Just imagine the total wealth in China and even a small percentage of that choosing to buy gold. This demand is going to be enormous.”
Although the Chinese government does not publish official figures on gold imports, People’s Bank of China Vice Governor Yi Gang said back in February that his country had imported more than 300 tons of gold in 2010.