China sees boom in gold demand

Investors interested in buying gold might like to know that Chinese demand for the yellow metal has seen a significant increase in the last 12 months.

According to the World Gold Council (WGC), demand for gold bullion in the Asian country reached 363.3 tons last year, representing an increase of 23.5 per cent compared with 2006, the Shanghai Daily reports.

Such a surge in demand might prove difficult to meet in the light of recent reports of gold supply shortages around the world, pushing up the price of gold further.

A separate report from the WGC last month cited falling mine output and higher gold extraction costs as restrictions on meeting demand that have helped to gradually push up gold prices over the last seven years.

Last year, Bloomberg reported comments from GFMS analyst Veronica Han that indicated increasing personal incomes in China could help to boost demand for gold in the country by up to 20 per cent over the next 12 months.

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