9 Jun 2010 10:53

China gold consumption to grow over 10 pct year-on-year - CGA executive

Beijing. June 9. INTERFAX-CHINA - China's gold consumption in 2010 will likely grow by more than 10 percent year-on-year on the expectation of a strong investment demand, a China Gold Association (CGA) senior official told Interfax at a June 9 conference.

"China's gold consumption has already grown by 10 percent year-on-year in the first four months of 2010," CGA Vice Chairman and Secretary General Zhang Bingnan told Interfax at the Mines and Money Beijing 2010 conference. "Gold prices on both the international and Chinese market are very strong this year, which will attract more investors. I therefore expect that the growth rate for the whole year will stay above the 10 percent mark."

China was the second largest consumer of gold in 2009, using a total of 430 tons, according to Zhang.

"The strong gold prices this year will also encourage gold producers to increase production. We will see China's gold output continue to grow from last year's level of 314 tons," Zhang added.

China has been the world's largest gold producer since 2007.

The price of gold on the international market reached a record high of $1,250 per ton on June 8, up nearly 90 percent from when the global economic downturn first began in August 2007."The large growth rate shows the market has confidence in gold to remain strong, regardless of economic uncertainties," Zhang added.

Zhang also predicted that the recent euro-zone debt crisis will help to bolster gold prices in China and on the international market for the time being.

Proven gold resources in China's deposits came to 6000 tons by the end of 2008, up 750 tons from the end of 2007, Zhang noted at the conference.

" I expect that China's total gold resources grew by more than 750 tons in 2009, as strong prices brought about an increase in investment to exploration projects. I see such investments continuing to rise in 2010," Zhang added.

The 2009 total for China's gold resources within deposits will be released in the second half of 2010, said Zhang.