The phenomenal rise of the Chinese gold market

The growth of China’s presence in the global gold market has been phenomenal in the last dozen years. Prior to this century, HSBC sent a delegation from their London gold department to see the Chinese financial authorities and were rebuffed as ‘trying to sell gold to China’. Since then, the Chinese financial authorities switched on and set off with a purpose.

In 2001, the Chinese government lifted its final controls on the gold market, releasing a pent-up demand that since then has become stronger. From 2001 to 2010, China’s annual consumption of gold grew at a 7.5% compounded annual growth rate. This chart shows how China’s demand for gold jewelry has increased from just over 15.55 tonnes [500,000 ounces] in the late 1980′s to over 373.25 tonnes [12 million ounces] at the end of 2010, in spite of gold going from $200 $1,650 an ounce.

At the same time, China has emerged from a minor global player economically to the second largest economy in the world with its sights set on being the largest. With its breakneck growth of around 10% per annum over this time, the transformation in China has been the envy of the rest of the world. Alongside this growth has been a transformation of Chinese society. From a working class society, we’re seeing the burgeoning growth of the Chinese middle class with a commensurate growth in income.

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Tags: China gold prices, Gold analysis, Gold future prices, Gold futures, Gold investment, Gold news, Gold price, gold price forecast, Gold prices, price of gold, Spot gold, Spot gold price

Posted by admin on Jan 17 2012. Filed under Gold predictions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry