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Monday, 18th December 2006 (5443 views)

Chinese demand for gold is helping to ensure strong world gold prices and is likely to continue to do so, according to experts.

Recent gold consumption levels in China are proving crucial is ensuring that global prices for the metal remain high. It is expected that the country's consumption of gold will total 350 tonnes in 2006, compared to 300 tonnes during last year, reports Forbes.

In particular, there is a growing market within China for gold from the jewellery industry, with a 7.7 per cent rise in demand from the sector and this could help to ensure China's ongoing development as a key gold investment market.

A statement from investment bank Numis Securities said: "We remain positive about the yellow metal due to its investment appeal and ongoing strong demand despite the high prices. India remains the largest consumer of gold, however, Chinese demand is expanding rapidly."

Recent changes in Chinese investment level legislation have enabled a growing number of Chinese investors to invest in gold bullion as well as gold contracts and gold jewellery. Such reforms could enable long-term demand for gold within the Chinese market to increase substantially and boost global gold prices.

 

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