Golden time for miners on demand, high prices
By Gong Zhengzheng (China Daily)Updated: 2007-02-28 10:34
The London Bullion Market Association recently predicted world gold prices would stay at $652.38 per ounce this year, up from less than $310 in 2006.
Consumer demand for gold in China will continue to grow this year following consecutive increases over the past four years, according to the World Gold Council, the London-based gold marketing organization funded by the world's leading gold miners.
The gold council earlier told China Daily that prospects for gold demand in China looked promising this year.
"Commemorative bars and coins for the forthcoming Year of the Pig have been selling rapidly since the last weeks of 2006 as the pig is the symbol of wealth and prosperity," the council said.
"Demand for both jewelry and investment products has reportedly been brisk in the first weeks of 2007 in the run-up to the Chinese New Year."
And the 2008 Beijing Olympics has spurred strong demand. "Olympic bars and coins also remain popular."
Last year, consumer demand for gold in China totalled 259.6 tons, up 3 percent from 2005, according to data from the gold council.
The figure maintains China's position as the world's No 3 gold consumer after India and the United States.
The 2006 demand consisted of 244.7 tons for jewelry, up 1 percent, and 14.9 tons in the form of net retail investment, an increase of 27 percent.
Trading volume at the Shanghai Gold Exchange, where there are 149 members conducting spot transactions with renminbi, jumped by 37.81 percent to 1,249.29 tons last year from 2005.
Albert Cheng, managing director of the World Gold Council Far East, suggested
China should cancel its 17-percent value-added tax on physical gold trading to
boost development of the gold market. The tax has been levied since 2005.
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