China ’09 demand for gold, output may gain to records Bloomberg/Beijing
China, the world’s largest gold producer, may have record demand and output this year as jewelry consumption soars and miners expand production after prices reached all-time highs, according to the China Gold Association.
The country’s gold demand may be more than 450 metric tonnes this year, up from 395.6 tonnes in 2008, and output may climb to 310 tonnes, compared with 282 tonnes a year earlier, Zhang Yongtao, deputy secretary-general of the association, said at a conference in Kunming yesterday. Annualised growth in China’s gold production was 9.5% in the past eight years, he said. China overtook South Africa to become the world’s largest producer in 2007 and the World Gold Council said in July that the nation may pass India as the biggest consumer. Bullion touched a record of $1,195.13 an ounce November 26 as a weaker dollar drove demand for precious metals as an alternative asset.
“The inflation concern this year has boosted the Chinese consumer demand for things like property, autos and gold,” Zhou Shijian, professor at Tsinghua University, said yesterday from Kunming, capital of the southern Yunnan province.
Bullion, up 34% this year, is set for a ninth annual gain as central banks, pension funds and individual buyers seek to protect their assets from potential currency debasement and inflation. Gold may climb to $1,500 an ounce as the dollar falls amid low interest rates, Kenneth Tropin, chairman of Graham Capital Management, told Barron’s in its November 30 issue.
Jewellery sales in China will climb at a “double-digit’’ pace this year as record household savings fuel demand for investment products and wedding gifts, Hong Kong Resources Holdings Ltd Chairman Kennedy Wong said on October 23. Middle-class buyers in China, who have only just started to buy gold as an investment product, drove a 16% gain in gold and silver jewellery sales in the first nine months, said Wong, whose company has 219 jewellery stores in mainland China.