By Bloomberg News - Nov 3, 2010 7:10 am

China’s gold market may double in the next decade as retail investment and jewelry demand gain, an official from the World Gold Council said today.

Consumption may gain to 800 metric tons to 900 tons in the next ten years, Wang Lixin, the World Gold Council’s Greater China general manager, said at a Shanghai conference today. “It probably will be achieved earlier than that.” China’s jewelry and investment gold demand was 428 tons in 2009, according to the council.

Gold climbed to a record $1,387.35 an ounce on Oct. 14 as investors sought to protect their wealth amid concerns about the global economic recovery, and is headed for a 10th consecutive annual increase. China and India will continue to drive demand for gold jewelry going into the fourth quarter, Bank of China International Holdings Ltd. said in a report on Sept. 27.

“In the past few years, China’s demand for retail gold investment has been increasing at about 50 percent each year,” Wang said. Gold demand from jewelry in China may gain by 8 percent to 10 percent annually, Wang said.

Gold demand in China, the world’s largest producer, already gained in the first half of this year as government measures to cool the property market and falling equities spurred investment, the Shanghai Gold Exchange said July 7.

Sales of gold bars by China’s Zhongjin Gold Co. have jumped this year as investment demand gains.

“Our sales of investment-level gold bars have reached 10 billion yuan in the first nine months, compared with less than 6 billion yuan for the full year 2009,” Wang Jinding, company president, said today at the conference. “The surge in gold prices is largely attributable to investment demand.”

China’s gold output may rise to 340 tons this year, from 314 tons last year, solidifying the nation’s position as the world’s largest producer, Zhang Fengkui, section chief of the raw materials department at the Ministry of Industry and Information Technology, said on Oct. 16.

Immediate-delivery bullion was little changed at $1,358.60 an ounce at 6:56 p.m. in Shanghai.