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| Updated: Dec. 10,2006 |
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Charles Kubach, Mine-Engineer.Com December 10, 2006 |
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China will consume 350 tons of gold this year, up 17% from last year, indicating
both a more prosperous China, and a growing population with more disposable income,
who have historically had an affinity for the shinny yellow precious metal.
Considering their in country production accounted for only 46% of their gold
consumption, the remainder was provided by outside sources. This level of gold consumption pushes China into the Big Three, India (1st), the United States (2d) and China, as the leading consumers of gold worldwide. In China, as with the rest of the world, a little more than ¾ of the gold consumption is in the jewellery market. The projected annual consumption of gold in 2006 is around 900 tons, while the projected annual supply of gold is around 1,000 tons. This would leave a surplus of a hundred or so tons. This would leave one to think this would depress the market in 2007, however the continuing floundering of the dollar is expected for the next year, and China is increasing their use and consumption of gold at a sustainable double digit rate (if their economy can maintain a robust pace of expansion they could easily take ½ of the surplus). To add fuel to the golden fire, turmoil in the Mid East is not going to improve next year, so gold prices will not drop too much, in fact they will most likely increase over 2006 prices. So, I think now that the Sleeping Dragon has awoken, it's demand for materials to satisfy its growing middle and upper income citizens will help the gold market remain at the lofty levels it now enjoys. -------------------------------------------------------------------------------- But that's just my opinion. Charles Kubach Mine-Engineer.Com |
