May 26, 2024

China’s Emerging Influence in the Gold Market

China and its people have a long held interest in the gold market. The country’s history has been marked by periods of unrest, and its people have regularly chosen to heed history’s warnings when it comes to investment. Their general preference has been for investments that they perceive as safe and solid, as opposed to paper instruments. Thus, their top two investment choices are gold and real estate.

During the course of 2010, China’s gold imports grew nearly 500 percent. What is most surprising is that we have this information at all. Normally China is quite secretive about their gold investments and imports.

China Comes Out

Further information on the Chinese gold market reveals that turnover on the Shanghai Gold Exchanges for the first three quarters of 2010 exceeded total global identifiable demand. The number of individual customers on the exchange neared 1.6 million.

When you also consider the fact that China is the world’s top gold producer and the recent joint announcement of ministry promotion of the gold market—its easy to see why China is considered to be a force to be reckoned with in the 2011 gold investment market.

Searching for Gold

The gloves are finally off after all. China has announced its first gold mutual fund and investment demand in the country is increasing from both individual and governmental sources. The country has positively connected their future development of the gold market to the competitiveness of financial markets and made it known to the world that they don’t plan to keep their movements quiet anymore.

Sensible investors and analysts are taking China’s actions into account when trying to predict the movements of the gold market for the coming year. After all, no one wants to ignore one of the biggest players in the room.