Trend Analysis to China gold market
China’s gold demand is expected to double from current levels over the next decade due to jewelry consumption and investment needs, the World Gold Council said in report released on Monday.
Gold’s position on the market remains as strong as ever as more and more people having lost faith in fiat money turn to buying gold. Investment in gold, which has always been regarded as a safe-haven during global recession, is now in ever greater demand. According to GBULLION DMCC experts, today’s gold bull market will not end until at least 2014, and they are almost certain that it may easily last for another 8 years.
‘In jewellery, the Chinese per-capita consumption is one of the lowest at 0.26 grams when compared to countries with similar gold cultures. If gold were consumed at the same rate per-capita as in India, Hong Kong or Saudi Arabia, annual Chinese demand could increase by at least 100 tonnes or as much as 4,000 tonnes in the sector alone,’ it said.
If the central bank boosts gold holdings to 2.2 percent of Forex reserves, ‘it could amount to a total incremental demand of 400 tonnes at the current gold price,’ the report added.
There are several reasons why physical gold demand and gold price will continue to increase. Some of these reasons are attributable to consumer-side economics while others are based in investor tendencies and still others are connected to macro-economic policy.
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.
Chinese demand for gold bars and coins rose 70% on-year to reach 180 tons, valued at about $ 7 billion, he said.
In the Demand Trends Report released earlier, the council said Chinese consumer gold demand rose 27% annually 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(China jaw crusher) reached a record 400 tons in 2010, a council report said.
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