China may increase gold imports

With surging investment demands in China, gold imports to the country are likely to increase in the coming year, according to Zhang Weixiang, an insider in the Chinese gold industry, during an investment forum held in Beijing last week.

According to Zhang, general civil gold reserves are estimated at 4,000 tons, while reserves accumulated by People's Bank of China totaled at approximately 600 tons. Despite an increment in average gold consumption in China, that has risen from 0.16 grams in 2002 to 0.35 grams, it is still below the international standards.

Prices of gold have increased by approximately 30% over the last year. Valued at a price of US$300 in 2002, prices of gold have soared to a two decades record high at US$771.10 an ounce.

A weakening U.S. currency and geopolitical reasons have triggered a surge in gold prices globally. Zhang added that in the past five years, gold consumption has increased by more than 50% in China whereby an Increasing number of Chinese are turning towards gold as a viable form of investment.