China’s big gold rush

Gold on display in a shop window in Hong Kong

With the government using TV ads to urge its citizens to buy bullion, an emerging middle class is splurging on the precious metal as an investment and jewellery

Brenda Bouw Mining Reporter

Vancouver — Globe and Mail Update Published on Friday, Jul. 02, 2010 6:42AM EDT Last updated on Friday, Jul. 02, 2010 11:17AM EDT

China’s consumption of gold is soaring alongside the price, as the Asian economic superpower and its citizens increasingly turn to the precious metal as a way to diversify their finances.

Gold prices have risen so quickly – 11.6 per cent in the last quarter alone and 84 per cent in the past three years – that it is becoming out of reach for some of the world’s jewellery buyers and investors. Yet even at about $1,200 (U.S.) an ounce, Chinese demand from both is soaring. Retail investment demand in China rose 57 per cent in the first quarter of this year from a year ago, while jewellery demand increased 11 per cent, according to World Gold Council estimates. .....

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