Wednesday, 18th May 2005 (3236 views)

Chinese gold output is being fuelled by strong demand, with prices lifting the market considerably.

According to Lu Wenyuan, president of the Chinese Gold Association (CGA), production could be set to increase by over five per cent in the coming year.

Output in the mainland marked a record high last year, exceeding 212 tons, and registering a 5.86 per cent increase since 2003. March figures were up by almost three tonnes on February's output, China Daily reports.

Chinese retail investment in gold was boosted by sales of commemorative gold coins and bullion in anticipation of the 2008 Beijing Olympic Games, and the jewellery industry also gave gold sales a significant boost.

"Bullish gold prices will encourage domestic gold mining firms to greatly increase investment in gold prospecting and exploration this year," said Cui Lin, an analyst at the Beijing-based metal consulting firm Antaike Information Development.

He added that the weak dollar would see world gold prices moving upwards towards the latter half of this year.

The World Gold Council has released similar forecasts, predicting consumer demand for gold will rise by more than 10 per cent in the Chinese mainland in 2005.

 

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