Gold Made Simple

Gold Made Simple

February 01, 2010 03:00 ET

China Set to Become World's Largest Gold Consumer

MANCHESTER, UNITED KINGDOM--(Marketwire - Feb. 1, 2010) - Since 2007, China has been the world's biggest gold producer. However, the nation may now also have taken over India to become the world's largest gold consumer.

Although official figures have yet to be released, it is estimated that 2009 saw a demand of 450 tonnes from China, a steep increase on the nation's 2008 demand of 395.6 tonnes.

The rising demand is being fuelled by increasing prices. While consumers in India, Turkey and the Middle East, traditionally locations with a high demand for the precious metal, have been put off by rising price tags, it's been quite the opposite in China. Consumers there are rushing to buy gold, attracted by buying into a rising market.

Albert Cheng, Far East Managing Director of the World Gold Council, attributes the rising demand to China's flourishing economy, which is enabling consumers to indulge in one of the country's favourite luxuries. It's not just the consumers buying gold in China either. The government recently announced it has increased its own holdings from 600 to 1054 tonnes since 2003.

The China Gold Association expects that forthcoming figures will indicate that production of gold also rose in 2009, from 282 tonnes in 2008 to 310 in 2009.

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