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China Gold Investment Demand "Will Keep on Doubling"

CHINESE Gold Investment demand will continue to grow at an annual rate of 100% over the next two years – while overall demand for Gold Bullion will also be strong – a leading Chinese gold industry figure has said.

"Enthusiasm for gold as an investment will get stronger, and domestic sales in this category will keep doubling in the next two years," said Zhang Bingnan, secretary general of the China Gold Association.

Gold Investment demand has soared in China in recent years. Data published by the World Gold Council show that the Chinese bought 90.9 tonnes of Gold Coins and bars in the first three months of 2011 – a 123% jump from the same period last year.

Overall demand for gold – including jewelry and other uses – "will grow at least 20% this year," Zhang said, adding that Gold Prices could "rocket" if the European debt crisis spreads further.

Zhang's comments follow an announcement this week from the People's Bank of China that it will double its issuance of commemorative Panda Gold Coins in order to meet rising demand.

"Inflation and the weakening purchasing power of the Yuan have driven up private demand for gold and this will continue," adds Zhong Wei, director of Beijing Normal University's Financial Research Center.

China's consumer price inflation rose to 5.5% in May.

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