The Requirement Of Gold In China In 2009
The last few years have seen a great rise in the prices of everything. The economy is hard hit all around the world. Things are becoming expensive day-by-day, and it is becoming difficult for an average person to live. Inflation has risen to unexpected levels in most parts of the world.
The last few years have seen an unexpected rise in the price of gold all over the world. The price of gold had not risen this much in the whole history of gold. However, in the year 2009, its high price level made records.
Evaluating the first two quarters of 2009, the consumer demand for gold in China had been totalled as far as 194.8 tonnes. This was equivalent to 18.7% with respect to the total demand of the world all around. During the same period, Indian demand for gold was totalled up as well. Around 126.7 tonnes was further equivalent to 12.1% of the total demand of the world.
The main reason behind this increase in gold consumption in China is due to the efforts that are taken to counter inflation, which has led to the increase in the average household saving and the income of the middle class. As the population of China is also greater than India, with an increase in the buying power of a middle class person, investment in gold and jewellery has increased a great deal.
A glance at the Chinese gold statistics depicts the following: Chinese gold reserves were 394 tonnes in 1999, which went up to 600 tonnes by 2003 and to a bewildering 1054 tonnes in 2009. Gold production by China rose from 270.491tonnes in 2007 to 290 tonnes in 2009.
This imbalance might be paired up with other elements as well, as they are expected to have a drastic effect on the gold market all across the hemispheres.
All this has happened because, as the prices of gold rose, the gold miners in China increased the production of gold. In addition to this, jewellery demand also increased in China in the year 2009. With the increase in the income of the middle class, the investment in gold assets and jewellery increased.
Not only this, the value of the shares of gold mining companies also increased last year. The high prices ensured high profits for the gold miners. Thus, this whole cycle created a great demand for gold in China in the year 2009. To ensure prevalence of this trend in the year 2010 as well, the Chinese banks and financial institutions have taken great measures. The People Bank of China has announced gold production and silver coins, which also include the commemorative coins for the 16th Asian Games and Xinmao. They plan to produce three million pieces, which will require 58 tons of silver, and more than 20 tons of gold bullions.
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