China's Gold Demand Surged In 2021

(January 30th, 2022 - Chen Tong , World Gold Council)

China's demand for gold coins and bars rose by 44 percent to 285 tonnes in 2021, according to the World Gold Council's (WGC) annual report released on Friday.

The council attributed the increase to steady income growth, stable gold prices and a decline in interest rates.

It also pointed out that China's commercial banks have been gradually promoting gold coins and bars to retail consumers, boosting gold investment demand.

Gold jewelry also showed strong growth, with purchases reaching 675 tonnes, a year-on-year increase of 63 percent.

The figures also reflected sophisticated tastes among Chinese consumers, the WGC said.

The council said the rising demand for gold is in line with China's GDP growth of 8.1 percent last year, a significant rise from the figure in 2020.

The surge was also pushed by China's young generation, with the council saying the design of gold bracelets, rings, and necklaces have become much more innovative and attractive.

Weddings postponed from 2020 to 2021 were also a factor in driving up demand as gold jewelry is a must-have for most Chinese brides.

Meanwhile, the WGC data suggested that the total position of China's gold-backed exchange-traded funds (gold ETFs) reached record 75.3 tonnes, worth $4.4 billion, at the end of last year.