As inflation jitters proliferate, Chinese investors are seeking refuge in the gold market.
In a recent report, the World Gold Council (WGC) said Chinese investors continued to "flock into gold" during the third quarter, with demand for bars and coins reaching 45.1 metric tons, valued at about 120 billion yuan ($18.1 billion). This topped the previous quarterly record of 39.6 tons in the January-to-March period.
Demands for gold include jewelry, industrial and dental uses and investment. China is already the world's second biggest gold consumer, with jewelry buying contributing the lion's share and investment also on the rise.
With the stock market fluctuating and the property sector subdued, the gold market seems to be a safe haven for capital, said Zhang Yingying, an analyst at China Galaxy Securities Co. Ltd.
So far this year, prices of gold futures at the Shanghai Gold Exchange have gained around 24 percent on buoyant demand.
The price is likely to continue north as central banks around the globe boost their gold reserves, straining supplies to the markets, said Wang Peifu, President of Zhaojin Mining Industry Co. Ltd., a gold miner based in east Shandong Province.
A bigger appetite from India and China for gold is expected to boost demand for the yellow metal globally, said the WGC report.
Consumers in the world's two largest gold markets continue to appreciate the enduring value of gold due to their rising income, high savings rate and strong economic growth, it said. |