Gold News

China joins Indian gold bonanza in bumper quarter

Gold prices have been rising consistently through the fall, but consumer demand for the precious metal has shown unexpected resilience in the buoyant Asian markets.

With the World Gold Council (WGC) reporting large overall increases in gold demand through 2007, the biggest market for gold jewelry, India, staged a 5.5 per cent quarterly rise in demand –amounting to around 135 tons.

But while India's autumnal festivals are famous for fetching golden gifts regardless of price hikes, it is neighboring Asian giant China that has shown the biggest and boldest rise.

Despite gold prices rising nearly $200 per ounce through August to early November, China's growing consumer classes showed an indomitable and price defiant will to buy gold, staging a 24 per cent increase in demand.

Albert Cheng, managing director for the Far East at the WGC, told Reuters that the burgeoning Chinese and Indian gold demand in defiance of rising prices was down to local cultural factors.

"It's the Asian mentality. One very simple psychology is if they don't buy today, it's going to be more expensive tomorrow," he said.

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