Two months before the Lunar New Year, the Chinese are already busy in their preparations, including acquiring and purchasing gold-related products, even as prices of the yellow metal have surpassed $67.69 per gram in Beijing.
Latest data gathered from the Web site of China's Ministry of Industry and Information Technology disclosed gold output by the world's second-largest economy grew by 8.436 metric tonnes, a 3.87 per cent hike year on year, to reach 226.388 metric tonnes during the January-August period.
In August alone, China produced 31.889 metric tonnes of gold, up from 30.08 metric tonnes in July, MIIT data showed.
Consumer enthusiasm to buy the yellow metal will remain just as high as the price after earlier reports indicated Chinese and their government remain intent to collect it over the coming months.
"There is excellent gold demand in China from retail investors, but it is very difficult to separate the official buying from the institutional or the retail buying. Data shows that China's share of global demand for gold has increased from just 6 per cent in 2000 to 18 per cent in 2010,'' www.mineweb.com quoted commodities analyst Rakesh Shah as saying.
Though little is known as to how much gold reserve China really has, one thing that is certain is that it has no plans to downsize its stockpile.
It was in 2003 when China for the first time reported its gold reserves at 600 tonnes. A silence ensued after that, leaving the markets to wildly speculate its gold wealth.
"Very little is known of gold in China. The government wants to keep it that way. But most foreign investors are aware that China is actually accumulating gold,'' analyst Santosh Debri said.
True enough, in 2008, China surprised the market when it announced that the People's Bank of China had doubled its gold reserves to 1,054 tonnes in the last five years. It was also at this time that China set up a task force to study its gold reserves. The team has reportedly been mulling to acquire very large gold purchases over the next 8 to 10 years.
As of April 2009, official data from the People's Bank of China revealed some 33.89 million fine troy ounces were added to China's gold reserves.
China has been buying into the global gold market and had made it easier for investors to buy and invest in the yellow metal. In fact, Chinese consumer demand for gold rose 25 per cent overall this year, higher than the 7 per cent global average.
"Throughout history, gold has been a far more popular investment option in Asia than in the West, and as more and more Chinese get wealthy, gold stands out as a sound investment and the ultimate hedge against inflation," Paul Watson, CEO of Green Technology Solutions Inc., earlier said.
China had been encouraging its citizens to buy and hold physical gold, either in jewelry, coins or in bullion bars, in a bid to build financial reserves in assets stronger than the U.S. dollar, euro and other weakening currencies.
In November, the World Gold Council reported that strong demand in investment and jewelry will drive China's total gold demand to 750 tons this year.
MIIT data showed Chinese gold consumption could touch 400 tonnes in 2011.
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