Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Chinese Gold Consumption Surged in 2017; Production Fell

  by    0   0

Gold consumption in China grew 9.41% in 2017, according to information released by the China Gold Association. Gold jewelry demand, especially in poorer regions, helped drive overall demand higher.

The Chinese consumed 1,089 tons of the yellow metal last year. The South China Morning Post called the surge in demand “a big turnaround” after a 6.7% slump in 2016. 

For the fifth straight year, China held on to its ranking as the world’s number one gold consumer.

Demand for gold jewelry was especially strong, rising 10.4% on the year. It was particularly robust in poorer regions of the country as incomes rose, according to the South China Morning Post. The mainland economy grew at a stronger than expected 6.9%. This bolstered consumer confidence and fueled spending and investment in precious metals.

In 2017, appetite for gold jewelry was particularly robust in lower-tier cities as China’s newly accumulated wealth gradually spreads from affluent coastal areas to less developed regions, according to Zhang Yongtao, deputy chairman of the association.”

Yongtao said he expects demand to remain strong into 2018.

Gold demand could remain resilient this year – there are early signs the growth trend will continue.”

The Chinese also bought a lot of gold bars. Sales were up by 7.28% to 276.39 tons. Analysts say tightening government restrictions on property investment and capital outflows increased the allure of gold. There was also a lot of safe-haven investing driven by constant saber-rattling between the US and neighboring North Korea.

According to Reuters, trade volume for gold products on the Shanghai Gold Exchange jumped by 11.5% last year to 54,292 tons. Turnover increased by 14.8% from the previous year to 14.98 trillion yuan (about $2.38 trillion). Shangai Gold Exchange ranks as the world’s largest physical gold exchange.

Meanwhile, gold production in China fell. Chinese mines produced 426.1 tons of gold in 2017, a 6.03% drop. It was the first production slump since 2000, according to the Chinese Gold Association. According to Reuters, the plunge in production happened despite the country’s biggest producer reporting record-high output for 2017. China National Gold accounts for around 10% of China’s overall production.

China ranks as the top gold-producing country in the world.

Analysts blame the fall in production on stricter environmental policies and increased resource taxes. But the production drop in China is part of a broader worldwide trend. As we reported last month, South Africa could run out of gold within four decades. Analysts say that at current production levels, South Africa has only 39 years of accessible gold reserves remaining. This could be another sign the world is approaching, or has reached, “peak gold.”

Peak gold is the point where the amount of gold mined out of the earth will begin to shrink every year, rather than increase, as it has done pretty consistently since the 1970s. During the Denver Gold Forum last September, the World Gold Council chairman said he thinks the world may have already reached that point.

The increase in gold demand in China stands in stark contrast to tepid sales in the United States. Peter Schiff talked about sagging US investment in gold last summer during an interview at International Metal Writers Conference noting that a lot of the investors who typically buy gold in America voted for Trump, and they’re no longer worried about the economy. As a result, they’re not buying gold. They’re buying stocks instead.

I think they’re making a big mistake. They should be selling their stocks and buying even more gold.”

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Money Is Not Wealth

When governments started locking down the economy in response to coronavirus, the Federal Reserve sprung into action. First, it slashed interest rates to zero. Then it quickly launched what we’ve dubbed QE infinity. In effect, that meant printing trillions of dollars out of thin air and pumping them into the economy. Meanwhile, the US government […]

READ MORE →

The Fed Now Holds a Record Percentage of US Debt

The US government has borrowed $4.2 trillion in the last 12 months, pushing the total national debt to over $27 trillion. In order for Uncle Sam to borrow, somebody has to lend. So, who is buying all of these government bonds? Foreign and domestic investors, commercial banks and US government entities all buy US debt, […]

READ MORE →

Silver Investment Demand Expected to Hit Five-Year High

Physical silver investment is expected to surge by 27% this year, according to the latest data released by the Silver Institute. Demand for investment silver is projected to come in at 236.8 million ounces in 2020. That would mark a 5-year high.

READ MORE →

The Fed Has No Way Out

We have argued that the Federal Reserve has no exit strategy from this extraordinary monetary policy. In fact, it never could extricate itself from the extraordinary monetary policy it launched during the Great Recession. Today, we’re merely witnessing the same policy on hyperdrive. And there is still no way out.

READ MORE →

The Tragedy of Savings

Low interest rates are a boon to borrowers. Thus the Federal Reserve’s quest to hold interest rates artificially low during the current economic crisis. We’re told easy money will bolster the economy as consumers and businesses take advantage of low rates and spend. But if you’re trying to save money, this anything but a boon. […]

READ MORE →

Comments are closed.

Call Now