Gold Demand in China at Record as Bear Market Spurs Sales.
Usage surged 41 percent to 1,176.4 metric tons in 2013 from the year before, according to data from the China Gold Association today. Output rose 6.2 percent to 428.16 tons, making China the largest producer for a seventh year, the Beijing-based association said in an e-mailed statement.
China probably overtook India as the largest user last year, according to the producer-funded World Gold Council, which highlighted the eastward shift in global demand as holdings in exchange-traded products contracted by a record. Gold posted the biggest annual drop since 1981 last year as the U.S. Federal Reserve prepared to scale back monetary stimulus that boosted asset prices while failing to stoke inflation.
“The surge in Chinese gold consumption has helped to limit price declines,” said Duan Shihua, a partner at Shanghai Leading Investment Management Co. “If Chinese demand is sustained, it will be a long-term bullish factor.”
Gold for immediate delivery sank 28 percent last year to end a 12-year rally as the Fed decided in December to trim monthly bond buying. Prices rallied to a two-week high of $1,276.03 an ounce, and were at $1,273.39 at 3:20 p.m. in Beijing. While that’s down 34 percent from the record $1,921.15 in September 2011, it’s 5.6 percent higher this year.