The Industrial and Commercial Bank of China Ltd (ICBC) is expecting China’s gold investment demand to increase by more than 10 percent in 2012, Bloomberg Businessweek reported. This comes as a result of buyers seeking a haven from Europe’s debt crises and the prospect of weakening currencies.
"Investors here want to hold part of their assets in gold to hedge for the risks, especially now that the financial crisis has evolved into a sovereign crisis,” Zheng Zhiguang, general manager of the precious-metals department at ICBC was quoted as saying.
ICBC contributes at least 20 percent of the earnings on the Shanghai Gold Exchange, China’s largest spot market for precious metals, and more than 30 percent of the gold-leasing business in China, according to Zheng. As China’s largest bullion bank, ICBC accounted for 16 percent of the nation’s bullion sales in 2011.
Chinese investors are turning from the lacklustre equity markets and property curbs to investing in gold, Zheng said.
"It’s necessary for individual, institutional or even government investors to hold gold when the value of money is decreasing at a time of possible quantitative easing or excessive money-printing practices,” Zheng added.
The World Gold Council (WGC) forecasts China to surpass India as the world’s largest gold market this year. In the first quarter of 2012, gold investment in China hit a record 98.6 tonnes, up 13 percent year-on-year, according to figures from WGC. In 2011, the investment demand surged 38 percent to 258.9 tonnes compared with 2010, while overall demand increased 20 percent to 769.8 tonnes. China’s total gold demand may reach 1,000 tonnes this year, the WGC added.
Copyright UBM Asia Ltd. Please don’t use or redistribute our content without adhering to our Copyright Policy