KUNMING — China, the world’s largest gold producer, might have record demand and output of gold this year as jewellery consumption soared and miners expanded production after prices reached record highs, the China Gold Association said yesterday.
The country’s gold demand might be more than 450 tons this year, up from 395,6 tons last year, and output might climb to 310 tons, compared with 282 tons a year earlier, Zhang Yongtao, deputy secretary-general of the association, said at a conference in Kunming . Annualised growth in production was 9,5% in the past eight years, he said.
China overtook SA to become the world’s largest producer in 2007 . The World Gold Council said in July China might pass India as the biggest consumer. Bullion touched a record of 1195,13 /oz on Thursday as a weaker dollar drove demand .
“The inflation concern this year has boosted the Chinese consumer demand for things like property, autos and gold,” Zhou Shijian, a professor at Tsinghua University, said .
Bullion, up 34% this year, is set for a ninth annual gain as central banks, pension funds and individual buyers seek to protect their assets from potential currency debasement and inflation.
Gold might climb to 1500 /oz as the dollar fell amid low interest rates, Kenneth Tropin, chairman of Graham Capital Management, told Barron’s in its issue today.
Jewellery sales in China would climb at a “double-digit’’ pace this year as record household savings fuelled demand for investment products and wedding gifts , Hong Kong Resources Holdings chairman Kennedy Wong said last month. Middle-class buyers in China drove a 16% gain in gold and silver jewellery sales in the first nine months, he said.
Gold for immediate delivery declined 0,9% to 1177,63/oz on Friday as commodities slumped the most this month after Dubai sought to defer some debt payments, rattling investors and spurring a dollar rally. Bullion found support from International Monetary Fund (IMF) sales to central banks.
Sri Lanka bought 10 tons from the IMF for about 375m, the IMF said, following India and Mauritius.
China is “quite a likely” buyer in coming weeks, Ben Westmore, an analyst with National Australia Bank, has said.
Chinese leaders pledged in Beijing on Friday to stick to stimulus spending and easy credit to support growth next year, signalling their unease about the stability of China’s nascent recovery .
Ending a closely watched annual planning meeting, the Communist Party leadership gave no sign it planned an early exit from the stimulus despite an upturn in growth. But it said stimulus efforts would shift emphasis from state-led investment to encouraging more consumer spending and private investment.
“The message the report is meant to send is that the central government is still not completely relieved about the domestic and international situation,” said Lu Zhengwei, chief economist for Industrial Bank in Shanghai. With Reuters
