Chinese Demand for Gold to Exceed Production, Reports China Mineral Company
Tad Brooks of the China Mineral Company believes that Chinese demand for gold is not slowing down and will need to be supported by imports in the near future. China imported 112 metric tons of gold in 2008, said Brooks. A rise in net imports was driven by 176% growth in investment demand for the yellow metal, which hit 68 tons, and 21% growth in jewelry demand to 326 tons, said Brooks, citing a report by the Beijing-based China Minsheng Bank.
According to official estimates, China’s gold mine production reached 282 tons in 2008, making the country the biggest producer in the world. But that hasn’t been enough to meet rising demand in the country, which is increasingly looking to gold as a means to diversify its large foreign exchange reserves.
“Exploration investment has really picked in the past two years, and we predict that the current mine supply output growth will not keep pace with rising demand,” Brooks said Gold demand was boosted in 2008 by the spectacular collapse of the Shanghai stock market, which tumbled more than 60% over the year, he said. The high demand for gold is expected to continue as Chinese investors look to bullion to hedge against inflated currency and high risk investments.
