China's gold buying triples as world demand tops $100 billion

19 February 2009

China's demand for gold nearly tripled in 2008 as world gold demand pushed through $100 billion barrier with investors seeking safety from crumbling financial and stock markets and India scaling down consumption due to soaring prices.

China, the world's second-largest gold consumer after India, consumed 395.6 tonnes of bullion in 2008 for jewellery and investment, or around 14 per cent of global demand, up from 327.8 tonnes in 2007, according to the World Gold Council.

Investment demand in China jumped to 68.9 tonnes last year from 25.6 tonnes in 2007. India's total bullion consumption dropped 14 per cent to 660.2 tonnes in 2008, of which net retail investment slipped to 190.5 tonnes from 217.5 tonnes in 2007.

Sustained investor interest in gold against a backdrop of the worst year on record for global stock markets and many other asset classes, helped push dollar demand for the safe haven asset to $102 billion, a 29-per cent increase on year earlier levels, it said.

According to World Gold Council's Gold Demand Trends, identifiable gold demand in tonnage terms rose 4 per cent on previous year levels to 3,659 tonnes.

"Going forward, investment demand will remain robust in China because people are looking for an investment tool that they easily understand," said Albert Cheng, Far East managing director of the World Gold Council.