China still goes for the gold
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
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
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
The nation last year surpassed South Africa as
the world's biggest gold-mining country.