Mind you, this was before China commenced gold futures trading on the Shanghai stock exchange.
BEIJING, Feb. 15 — China surpassed the United States as the world’s second-biggest retail gold market after India in 2007 by volume despite rocketing prices of the metal.
Total consumer demand in China’s mainland, Hong Kong and Taiwan reached 363.3 tons, up 23.5 percent from a year earlier, the World Gold Council said in a research report.
India had a gold demand of 773.6 tons last year, while the figure in the US sat at 278.1 tons.
Mainland gold demand, including jewelry and retail investment, topped 326 tons, up 26 percent from 2006, and the first time it surpassed the 300-ton level. Mainland gold-jewelry demand reached 302 tons in 2007, a year-on-year growth of 23.5 percent.
What makes the Chinese market stand out is the growing demand in the fourth quarter, when most other markets saw demand drop as costs soared.
Gold prices hit a three-decade high and topped more than US$900 an ounce on concerns over inflation, global economic uncertainty, the likelihood of an American recession and a weak US dollar.
In the fourth quarter, mainland gold demand rose 18 percent to 94.3 tons. In India gold demand tumbled 64 percent to 83.9 tons and in the US it fell 15 percent to 110.7 tons.
“It’s a milestone for China’s gold industry with demand surpassing the 300-ton level,” an industry veteran said yesterday.
Concerns over domestic inflation and the volatile stock market also added to the investment drawing power of gold as a haven.
China’s gold demand this year is again unlikely to be affected by rising prices as Chinese tend to buy at high prices in the hope of even further increases, World Gold Council veterans said in January.
Chinese gold demand was stagnant during the late 1990s and early 2000s but started going upward from 2003. China’s gold sales volume stood at 207.6 tons in 2003, a 2.0 percent rise to end a five-year wane.
The gold-sale rise is also in line with the country’s economic take-off.
China is expected to have a gold consumption of 600 tons in 2010, according to industry insiders.
The nation last year surpassed South Africa as the world’s biggest gold-mining country.