China and gold: the most, biggest, best

Demand for gold is still growing

Last year, China became the world’s largest gold market. Private sector demand for gold is expected to grow by around 25pc, from the current level of around 1,100 tonnes per year, to at least 1,350 tonnes by 2017.

China’s middle class will grow by 200m

China’s middle class will grow by 60pc, or 200m people, to a total of 500m people over the next six years. To put this in perspective, the total population of the United States is 319m. There are now 170 cities in China with more than one million inhabitant. These affluent consumers are those most likely to buy gold.

Chinese want to spend more on gold

Some 80pc of consumers plan to maintain or increase spending on 24-carat gold jewellery over the next 12 months. This is based on the belief that gold will hold its long-term value and an expectation of growing levels of disposable income.

China is the biggest jewellery market in the world

China’s jewellery market has nearly trebled in size over the past decade, and currently makes up 30pc of jewellery demand worldwide. There are more than 100,000 retail outlets selling 24kg of gold in China and the market is expected to grow to 780 tonnes by 2017.

Gold for wedding gifts

Around 40pc of jewellery consumption in China is connected to weddings

It’s not just about jewellery

Demand for gold in Chinese electronics has grown from 16 tonnes in 2003 to 66 tonnes in 2013. China is also the leading market for gold patents, such as the use of nanogold in healthcare.

The Chinese like to save

Chinese bank accounts hold an estimated £7.5trn. In comparison, household spending on gold is relatively small, at $300m.

Gold is seen as a stable investment

Rising house prices in China and few alternative saving options means that gold is seen as a stable investment. Chinese investors prefer physical gold over paper, with a lot of investment focused on small gold bars. Demand for gold bars and coins could reach 500 tonnes by 2017, 25pc higher than last year’s record levels.

All facts from World Gold Council's report, “China's gold market: progress and prospects”

more