The citizens of China continue to buy gold in record volumes for the fourth consecutive month hitting yet another new record in October. China now has to potential to overtake India as the world's largest consumer as soon as this year.
Author: Lawrence Williams
Posted: Tuesday , 13 Dec 2011
Chinese gold imports through Hong Kong, the main route for gold to reach mainland China, hit yet another new record in October according to Hong Kong government statistics. The October total was 85.7 tonnes - 50% up on the September figure which was itself a new record and a massive 40 times higher than imports via this route a year ago. Indeed the amount imported through Hong Kong amounted to over a quarter of estimated World demand for the yellow metal. Indeed it is the fourth successive month of record imports into China and overall imports through Hong Kong for the first 10 months of the year are around three times higher than a year ago..
nd this isn't even the peak season for Chinese gold buying which happens mostly around the Chinese New Year which next year, The Year of the Dragon, begins on January 23rd.
However it has been noted by some observers that Chinese gold imports may well have fallen off sharply since October due to the strong dollar making gold more expensive. The premium paid for gold on the Shanghai market has dropped from around $50 only a month ago to almost zero recently which has almost certainly arisen due to a falling off in demand, although yesterday's drop in price may re-stimulate interest.
With China the world's largest gold producer with an output last year of 341 tonnes - a figure which is expected to grow by 3-4% this year, the country could well overtake India as the world's largest consumer as soon as this year. It is widely believed that the country's mined gold output is all bought by the government for its official reserves which are thus being increased without having to buy on the open market. Last time China reported its official gold reserve total was two and a half years ago. Also China does not publish its total import figures for gold, but the Hong Kong figures are considered a major guide to the overall direction of the country's total gold imports.
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