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CHINA looks set to increase its imports of Gold Bullion this year – despite being the world's number one Gold Mining producer – according to GFMS, the leading precious metals consultancy.

Private investment demand for Gold Bullion – in the form of Gold Bars and coins – could push imports for 2011 above 400 tonnes, the equivalent to 15% of all global mine production last year.

GFMS also forecasts that Chinese silver demand will outstrip domestic Silver Bullion production.

"There is a widening demand for silver as investment in China because of its lower entry point," said Philip Klapwijk, executive chairman of GFMS, on Thursday. 

"[Silver] is also being increasingly recognized as a physical investment asset, which will support demand." 

Klapwijk has previously said it will be "a close call" between China and India as to which country registers the higher demand for Gold Bullion in 2011.

Data published by the World Gold Council show that India remains the world's number one gold market. Total Indian gold demand (291.8 tonnes) remained higher than China's (233.8 tonnes) in the first quarter of 2011. 

However, Chinese demand for Gold Bars and coins (90.9 tonnes) exceeded India's (85.6 tonnes).

Klapwijk's latest comments come as the head of China's largest state-owned gold miner predicts the gap between domestic supply and demand will continue to grow in the years ahead.

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