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Thursday, 7th May 2009 (1867 views)

China will become a major buyer in the international gold market in the future, an expert has predicted.

John Burbank, founder of Californian global hedge fund Passport Capital, told the Value Investing Conference that Lebanon currently has a gold/gross domestic product (GDP) percentage of 28.8 per cent, the highest in the world, according to Manual of Ideas.

China has a gold/GDP percentage rate of 0.8 per cent, compared with 1.7 per cent for the US, he added.

In a presentation entitled China and the US Dollar: Should We See Other People?, Mr Burbank pointed out that China is "the world's marginal provider of liquidity".

He explained that the country is likely to purchase higher levels of gold in the future, as the precious metal has maintained an annualised appreciation rate of 13.2 per cent over the last ten years.

China recently announced that it has become the fifth largest holder of gold bullion in the world, having increased its gold reserves by 75 per cent to over 1,000 tonnes since 2003.

 

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