China is the world’s second largest consumer of gold, so their interest in the metal is understandable. It is also the world’s largest producer of the metal. Still, the country is exhibiting a newly invigorated consumer and investor interest in the metal that is bound to capture some attention.
The Gold Reserves
Notoriously secretive, China rarely either publishes gold trade figures or comments on its reserves. It came as a shock, therefore, to find out from the State Administration of Foreign Exchange that state reserves of gold have increased to a jaw dropping 1,054 tonnes. The last time that reserve figures were made public was in 2003 when they equaled 600 tonnes. But that only one sign of the current Chinese interest in gold.
Consumer and Investment Interest
Chinese officials have indicated their interest and support for increasing the country’s gold reserves even further. Gold imports in the country have reached 209 tonnes, an impressive amount considering the high for 2009 was only 45 tonnes.
Experts speculate that though there has been no formal announcement, the government is approving these imports in an effort to encourage private gold investment in the country. Either way, investors and consumers are turning to the precious metals to provide themselves with an alternative to the threat of inflation.
The Future is Golden
Representatives for the World Gold Council have speculated that the investment demand for the metal could reach to 150 tonnes. The retail and jewelry demand for the metal, traditionally the driving force behind the metal’s prices, may even double in the next ten years.
The metal’s rise has been meteoric, but there’s no reason to believe that this level of interest will not continue. Predictions state that China will lead a worldwide demand for gold in the next year.
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