China: gold demand at highs
According to data from the China Gold Association today, China gold consumption and production extended to record levels as the bearish equity market spurrs demand of jewelry and bars. Usage surged by 41% to 1,176 metric tons in 2013 from the year before. Output rose by 6.2% to 428.16 tons, making China the largest producer for a seventh year in a row.
“As the domestic market offers little alternative choices - the equity market underperformed while the government discouraged investments in the real-estate sector - more of the growing wealth is looking to gold as a means to store value,” economists at Capital Futures Co. in Beijing explain.
“The surge in Chinese gold consumption has helped to limit price declines,” analysts at Shanghai Leading Investment Management Co say. “If Chinese demand is sustained, it will be a long-term bullish factor.”
Bullion price hit a 3-month high of $1287.5 per ounce on Tuesday.