Chinese gold production continues to increase

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Published : October 18th, 2011
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Category : GoldWire

 

 

 

 

China's gold production continues to increase and reached 226,388 metric tons in the first eight months of this year. This corresponds with an increase of 3.87% compared with the same period last year, as China's Ministry of Industry and Information Technology announced yesterday. In the last decade China has become the world’s largest gold producer, and observers expect the country to surpass India as the world's largest gold consumer soon.

In August alone, China produced 31.89 metric tons of gold. The total value of gold produced by China's mining companies reached $26.55 billion in the first eight months of this year. This corresponds with an increase of 23.14% compared with the same period last year. China's total gold output set new records in 2010 by reaching 340.88 metric tons. Observers expect China's domestic gold producers to surpass this level by the end of this year.

However, India is still the world's largest importer and consumer of gold. Despite rapidly rising gold prices, India accounted for more than a third of global gold demand in the first half of this year. Gold sales by Indian traders rose 21% year-on-year. Indians bought a total of 540 metric tons of gold in the first six months of 2011, with the country's gold demand rising by 38% in the second quarter. China's gold demand picked up by 25% during the same period. Experts and gold traders expect India's festival season – kicked-off by the Diwali festival of lights this month – to set new sales records this year. Silver sales are expected to rise by around 30% compared with the previous year.

Despite India's rapidly rising appetite for gold, China could surpass India's physical gold demand by the end of this year, as Goldcorp CEO Chuck Jeannes noted in late July. High inflation in China is probably one of the main reasons for the rising appetite for precious metals among domestic investors. Inflation reached 6.1% in September, slightly down from 6.2% in August, though food inflation jumped to 13.4%. Despite the slight decline (0.1%) in the country's inflation rate in September, this figure remains well above the official inflation target of 4%.

China's domestic investors view commodities and other tangible assets as a means of protecting their wealth and savings from the ravages of inflation. This primarily includes purchases of gold and silver in the form of jewellery, coins or bars. China's investment demand for these metals more than doubled to 90.9 metric tons in the first quarter of 2011. In the wake of this rapidly rising gold demand, China has become the world's largest market for coins and bullion bars – beating India for the first time ever, according to a World Gold Council report from May. However, India remains the largest global gold jewelry consumer. Though many analysts continue to predict a fall-off in Asian demand owing to higher and higher gold and silver prices, economic problems all over the world – an concerns over currency debasement – are continuing to drive more and more Asian into buying gold and silver.



Roman Baudzus

Originally published on Goldmoney.com here

 

 

Data and Statistics for these countries : China | India | All
Gold and Silver Prices for these countries : China | India | All
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