Investment demand is running at over 1000 tonnes last year, China plans to add another 800 tonnes to it's reserves while the Ruskies intend to bump up their reserves by another 10%. These 3 factors alone will vacuum dry world Gold mine supply which runs at 2,200 tonnes per year and is in long-standing decline. It doesn't take a rocket scientist to figure out that real world demand for Gold is actually much higher (add another 500-700 tonnes for Indian Jewelry demand), so someone out there who thinks they own a share of Gold (lets say an ETF owner) will be left holding a paper bag when the music stops.

ESL

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China to produce 290 mt of gold in 2009, up 2.8% on year Singapore

(Platts)--23Mar2009 China aims to produce 290 mt of gold and raise gold reserves by 800 mt in 2009, according to a statement on the Ministry of Industry and Information Technology's web site. Miao Wei, vice-minister of industry and information technology, told an industry forum last week that the main goal of the gold industry this year was to improve and strengthen management relations and operations. China's gold production in 2008 reached 282 mt, with gold reserves increasing about 700 mt for the year. The top three producing provinces' output represented about 46.4% of the country's total. They are Shandong, Henan and Jiangxi provinces. The country's overall profit from the gold industry surged to Yuan 12.4 billion ($1.82 billion) from Yuan 9.020 billion a year earlier. In 2007, China produced 270.49 mt of gold, according to previous figures from the China Gold Association. China's gold production has grown about 7.6% per year from 2003 to 2008, with an average growth in profit of about 41%, Miao said. According to earlier local press reports, China's proven reserves of gold ranked seventh in the world, Hou Huiming, vice-secretary of China Gold Association said in May 2008, and the country's existing gold reserves were 4,634 mt at that time. ---Yuencheng Mok, yuencheng_mok@platts.com Similar stories appear in Platts Metals Week. See more information at http://plattsmetals.platts.com