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April 16, 2014

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Home » Business » Energy

China’s gold demand tipped to jump 20%

By Hu Xiaocen | April 16, 2014, Wednesday | Print Edition

CHINA’S gold demand is expected to consolidate this year and expand by 20 percent from last year to at least 1,350 tons in 2017, driven by a rising middle class and private savings, the World Gold Council said in a report yesterday.

China overtook India as the world’s biggest gold market last year by posting a record-high demand of 1,132 tons, according to the London-based industry association’s report. That represented an annual increase of more than 30 percent from 2012, which was mainly due to the buying spree that was triggered by plummeting prices in China in April last year.

“The cultural affinity for gold runs deep in China and when this is combined with an increasingly affluent population and a supportive government, there is significant room for the market to grow even further. The country is now at the center of the global gold ecosystem,” said Albert Cheng, WGC’s managing director for the Far East.

“While China faces important challenges as it seeks to sustain economic growth and liberalize its financial system, growth in personal incomes and the public’s pool of savings should support a medium-term increase in the demand for gold, in both jewelry and investment.”

However, further liberalization of China’s financial sector could reduce the appeal for gold investment in the next few years. The two gold exchange-trade funds have seen declining assets since their launch at the Shanghai Stock Exchange last July, according to the report.

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