China – the world’s biggest consumer of gold

(June 13, 2011 - by Barry Stuppler)

China may diversify $3.04 trillion in reserves and invest in gold, silver and copper.

Albanian Minerals President and CEO said:

• “China is the world’s biggest consumer of gold, copper , iron ore, chrome ore, ferrochrome, silver and other metals. China needs to invest now in metals.”

• “The U.S. dollar, along with the euro and  other major currencies, has been under heavy pressure due to growing government deficits.”

• “As more money is printed and pumped into economies, the more devalued those currencies become. This also reduces the value of paper-denominated assets.”

• “ China should reduce its $3.04 trillion foreign exchange reserves and diversify its holdings in gold, oil copper and metals.”

China’s foreign exchange reserves increased by US$197.4 billion in the first three months of this year to $3.04 trillion .

China is now the world’s biggest consumer of gold. China is also the biggest producer of gold. China produced 351 metric tonnes of the metal in 2010.

The World Gold Council (WGC) said in a quarterly report that China buyers overtook India as the globe’s biggest purchasers of gold in the first quarter of 2011. China’s investment demand increased to 90.0 metric tonnes (40.7 tonnes in the year prior), compared to India’s 85.6 tonnes.

China’s gold demand last year hit 700 metric tonnes.  Global demand for gold in the first quarter of 2011 totaled 981.3 tonnes, up 11% year-on-year from 881.0 tonnes in the first quarter of 2010. In U.S. dollars, this translates to $43.7 billion in 2011, compared with $31.4 billion in the first quarter of 2010.

Chinese investors more than doubled their purchases of gold during the first quarter in 2011, compared to the same period last year. Chinese investments into bullion surged 179% the first quarter of 2011 as China invested $4.1 billion into gold bars and coins.