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Chinese Buying Gold Push Gold Imports to Record High

THE GROWTH in the numbers of people Buying Gold in China has pushed Chinese gold imports from Hong Kong to a record high, according to figures released by the Hong Kong government and reported by the FT.

China imported 56.9 tonnes of gold from Hong Kong in September – six times the volume imported over the same period last year – after a surge in the numbers Buying Gold over the summer. In the three months July, August and September, China imported around 140 tonnes of gold – compared to 120 tonnes in the whole of 2010.

China's gold imports from Hong Kong are regarded as a proxy for the country's overall gold buying from abroad.

The last decade has seen a strong rise in the number of Chinese Buying Gold.

"China, along with India, has understandably been one of the focal points in the gold market over the last decade as its share of total global demand has climbed from 6% in 2000 to 18% in 2010," Marcus Grubb, managing director for investments at the World Gold Council, told China Daily last week.

"Growth in jewelry demand has been over 13% year-on-year," adds Cameron Alexander, senior analyst at leading precious metals consultancy GFMS.

There is evidence to suggest that many Chinese are Buying Gold jewelry for investment purposes.

"GFMS currently forecast that this year Chinese jewelry consumption will climb by 15% in volume terms," says GFMS chairman Philip Klapwijk.

"The bulk of this growth [is expected to come] from the dominant 24-carat market. This is significant because record demand for high-carat jewelry is being motivated by similar reasons to those buoying purchases for Gold Bullion products."

"Young people can regard gold jewelry as old-fashioned," Yang Aiping, who was interviewed in Beijing while Buying Gold, tells China Daily.

"But they can also keep them and pass them on to their children as heirlooms. I believe gold is the last thing to depreciate."

Sun Fengmin, secretary-general of the Gems and Jewelry Trade Association of China, adds that macroeconomic factors are a key reason why people in China are Buying Gold.

"In the period of global economic and financial uncertainty, gold's role as a monetary asset, global currency and risk diversifier all make it an attractive international asset class for domestic investors."

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