BEIJING—Gold is making headway in China as rising inflation makes the metal more attractive to investors there, placing the country in a position to challenge India as the world’s top gold consumer.
Chinese gold demand nearly tripled in the last 10 years to around 600 metric tons, a senior World Gold Council official said Thursday. Chinese demand for gold bars and coins soared 70% from a year earlier to reach 180 tons, valued at about $7 billion, he said.
Speaking at a news conference in conjunction with the release of the 2010 Gold Demand Trends Report, the council’s managing director for the Far East, Albert Cheng, said China was the “strongest market for investment demand” in gold last year.
In the Demand Trends Report released earlier, the council said Chinese consumer gold demand rose 27% in 2010 to 579.5 tons in 2010. Demand for the greater China region—which also includes Hong Kong and Taiwan—was up 29% at 607.1 tons. India, the world’s top gold consumer, saw a 66% rise in demand to 963.1 tons. Chinese demand for gold jewelry reached a record 400 tons in 2010, a council report said.
China produced a record 340.9 tons of gold in 2010, up 8.6% from a year earlier, the China Gold Association said last month.
The World Gold Council said that after reaching a 10-year high in 2010, global gold demand is set to remain strong in 2011 though growth will likely slow from last year’s pace. Mr. Cheng also said that in less than 10 years, China’s gold demand could double.
“The surging investment demand we see in China is also a reflection of … the ongoing internationalization of the Chinese Yuan,” he added.
Abstract from The Wall Street Journal, article by Chuin-Wei Yap dated February 18, 2011, http://online.wsj.com