The World Gold Council (WGC) released its latest report in April 2014 reviewing China’s gold demand in 2013 and providing an outlook for gold bar investment and gold jewellery purchase.
The report said that China accounted for 26 percent of global private sector in gold demand in 2013. The total gold consumption in private sector for jewellery and investment and industrial applications in China is to increase from the current 1,132 tonnes per year to at least 1,350tonnes by 2017 – a growth of 20 percent over the next four years.
The report suggests that by 2020, China’s middle class is expected to grow by over 60 percent with a population of 200 million to 500 million. Also supported by the rising real incomes, the newly emerging middle class in tier 3 and tier 4 cities, a deepening pool of private savings and rapid urbanization across China, the outlook for gold jewellery and investment demand is expected to grow and reach at least 780 tonnes by 2017.
Albert Cheng, managing director of the Far East at WGC said: "The cultural affinity for gold runs deep in China and when this is combined with an increasingly affluent population and a supportive government, there is significant room for the market to grow even further.”
The report found that Chinese investors prefer physical gold over paper. It also said that in the medium term demand for bars and coins could reach 500tonnes by 2017 -a rise of nearly 25 percent above the record level set last year.
The report said that 40percent of Chinese jewellery consumption relates to weddings. The official gold holdings in China totaled 1,054 tonnes at the end of 2013 which made it the world’s sixth largest holder of bullion.
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