GOLD purchases in China rose to 200 tons in the first two months of 2011, helping to propel prices to a record, as Chinese flocked to buy the metal as a protector of their wealth against inflation, UBS AG said.
The interesting thing about gold in the past month or so is that China is the big buyer, Peter Hickson, global commodities strategist with Switzerland s largest bank, said yesterday. We estimate about 200 tons of gold was bought by China since the start of this year. The bank didn t have a comparable figure for last year.
Gold, which rallied 30 percent last year, is trading near a record US$1,434.93 an ounce touched Tuesday as uprisings in the Middle East, rising inflation and currency debasement prompted investors to buy the metal as a store of value.
Prices could rise to US$1,500 an ounce in the next six months, Hickson said.
Gold investment in China, the largest buyer of the precious metal after India, could gain 40 percent to 50 percent this year amid a lack of other alternative investments, Wang Lixin, China representative for the World Gold Council, said last month. He called the forecast a conservative estimate.
China s gold investment demand in 2010 jumped 70 percent to 179.9 tons, surpassing Germany and the United States, as buyers sought out bars and coins, the London-based industry group said. Consumption by the jewelry sector rose to a record 400 tons, it said. China imported more than 300 tons of gold last year, People s Bank of China Vice Governor Yi Gang said Feb. 26 in Beijing.
Gold for immediate delivery traded down 0.4 percent to US$1,428.07 an ounce at 11:15 a.m. yesterday in Singapore. Bullion denominated in yuan rose 1 percent to 303.70 yuan (US$46.20) a gram in Shanghai, approaching a record 314 yuan Nov. 9.
Jewelers at shopping malls across Beijing were witnessing a gold rush as residents spooked by inflation look to protect their money, China Daily reported Monday.
Statistics from Beijing Caibai, the city s largest jewelry store, showed sales of gold and other jewelry had totaled about 4 billion yuan so far this year, a 70 percent increase from a year ago, the report said.
China displaced South Africa as the world s biggest gold producer in 2007. Imports through October rose almost fivefold from the total shipped in the previous year to 209 tons, according to the Shanghai Gold Exchange. Mine output reached a record 340 tons last year, the China Gold Association said.
The Industrial and Commercial Bank of China Ltd., the world s biggest lender by market value, started physical-gold linked savings accounts in December in an initiative with the World Gold Council. Account openings surpassed 1 million with over 12 tons of gold stored on behalf of investors, it has said. (SD-Agencies)
