China still goes for the gold as haven www.chinaview.cn
2008-02-15 09:21:00
BEIJING, Feb. 15 -- China surpassed the United States as
the world's second-biggest retail gold market after India
in 2007 by volume despite rocketing prices of the metal.
Total consumer demand in China's mainland, Hong Kong and
Taiwan reached 363.3 tons, up 23.5 percent from a year earlier,
the World Gold Council said in a research report.
India had a gold demand of 773.6 tons last year, while the
figure in the US sat at 278.1 tons.
Mainland gold demand, including jewelry and retail investment,
topped 326 tons, up 26 percent from 2006, and the first time
it surpassed the 300-ton level. Mainland gold-jewelry demand
reached 302 tons in 2007, a year-on-year growth of 23.5 percent.
What makes the Chinese market stand out is the growing demand
in the fourth quarter, when most other markets saw demand
drop as costs soared.
Gold prices hit a three-decade high and topped more than
US$900 an ounce on concerns over inflation, global economic
uncertainty, the likelihood of an American recession and a
weak US dollar.
In the fourth quarter, mainland gold demand rose 18 percent
to 94.3 tons. In India gold demand tumbled 64 percent to 83.9
tons and in the US it fell 15 percent to 110.7 tons.
"It's a milestone for China's gold industry with demand
surpassing the 300-ton level," an industry veteran said
yesterday.
Concerns over domestic inflation and the volatile stock
market also added to the investment drawing power of gold
as a haven.
China's gold demand this year is again unlikely to be affected
by rising prices as Chinese tend to buy at high prices in
the hope of even further increases, World Gold Council veterans
said in January.
Chinese gold demand was stagnant during the late 1990s and
early 2000s but started going upward from 2003. China's gold
sales volume stood at 207.6 tons in 2003, a 2.0 percent rise
to end a five-year wane.
The gold-sale rise is also in line with the country's economic
take-off.
China is expected to have a gold consumption of 600 tons
in 2010, according to industry insiders.
The nation last year surpassed South Africa as the world's
biggest gold-mining country.
