China’s demand for gold to keep soaring despite easing economy

THE RAPID increase in Chinese demand for gold is set to continue even as the economy’s growth moderates, according to forecasts released by the World Gold Council this morning.

The size of the Chinese gold market will increase by another quarter by 2017 according to the outlook, having quadrupled in the decade between 2003 and 2013.

“Even with a relative slowdown in growth, our key finding is that gold demand will increase from its current record high to at least 1,350 tonnes. We actually think that’s a conservative case,” said spokesman Alistair Hewitt.

“Financial repression makes gold a good place to save especially for those that think property is overvalued,” he added, noting that Chinese banks often offer negative real rates of interest. The report also suggests Chinese savers are wary of inflation, after sustained double-digit increases in the 1990s.

The Council also polled Chinese consumers on attitudes to gold, indicating optimism towards the precious metal: 60 per cent believe the price will increase in the next 12 months.

Another 44 per cent say they expect to buy more gold jewellery in the next year than they did last year, against 15 per cent who say they will spend less.