Investment Demand Boosts Chinese Gold Imports Sixfold

Source:

"China imported 209.72 tons of gold in the first 10months of the year."

Investors' rapidly-growing appetite for gold has pushed up China's gold imports sixfold in the first 10 months of the year, a Shanghai Gold Exchange official said on Thursday, highlighting the appeal of the precious metal as a hedging tool.

In a rare revelation of China's gold trade data, which is not published by customs, exchange chairman Shen Xiangrong said the country imported 209.72 tons of gold in the first ten months of the year.

On an annual basis, China's gold imports would reach about 250 tons, higher than a Reuters survey consensus last month of about 180 tons.

China's gold output could reach 324 tons for 2010, based on calculations on official gold output data in the first ten months of the year.

The unprecedented enthusiasm for gold, as well as other precious metals, has pushed up trading volumes on the Shanghai Gold Exchange.

Shen said the trading volume of gold on the exchange in the first 10 months rose 43% from a year earlier to 5,014.5 tons.

For silver, 18,900 tons of the metal went through the exchange in November, higher than the total trading volume of 16,400 tons in 2009, he added.

The exchange is considering including overseas institutions as trading members, Shen also said, but did not give a time frame.

Currently locally incorporated branches of five foreign banks, including Credit Suisse, HSBC, Standard Chartered, Bank of Nova Scotia and ANZ, are trading members of the exchange.

Shen added that the exchange was studying new products such as spot options and exchange-traded certificates, but declined to give details on when such products would be launched.

The exchange will continue to focus on spot and forward trading, he said.

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