Tuesday, September 20, 2011

China’s Gold Investment to Top Record: Cheng

Gold investment demand in China is likely to top a record 200 metric tons this year, the World Gold Council said.

The country’s investment demand surged 70 percent in 2010 to an all-time high of 187 tons, said Albert Cheng, the Far East managing director at the World Gold Council.

China’s “investment demand has picked up exponentially,” Cheng said yesterday in an interview in Montreal. “The financial crisis has triggered people to be cautious of anything they don’t understand,” boosting demand for bullion as an alternative asset.

Gold futures have surged 29 percent this year, touching a record $1,923.70 an ounce on Sept. 6. The metal climbed as escalating debt woes in Europe and the U.S. boosted demand for haven assets. India is the world’s top bullion buyer followed by China. The two countries accounted for 54 percent of world gold consumption in the second quarter, Cheng said.

The council has estimated demand from China may double in 10 years. The forecast may be “too conservative,” Cheng said.

Subscribe to our Free Gold & Silver Financial Newsletter