The Chairman of the Shanghai Gold Exchange (SGE) reported that China’s gold imports soared 480% to 209.7 tones from January to October on a year-over-year basis. Mr. Wang Ze, General Manager of the SGE, noted that China’s gold imports now represent approximately 10% of global gold production. Furthermore, trading volumes on the SGR rose 43% in the first ten months of the year, to 5,014.5 tons.
Mr. Wang Ze subsequently discussed details of the report with analysts at JPMorgan, where he noted emphasized that government purchases were not a factor in the substantial increase. Consequently, JPMorgan contended that Mr. Wang Ze’s account “corroborates news reports that the demand surge has been fueled by retail investors seeking a hedge against inflation.”
The firm went on to report that based on the latest data, gold holdings now account for 1.78% of China’s $2.65 trillion in foreign exchange reserves. In addition, china is now the world’s second largest consumer, and largest producer of gold. This year the nation’s output is forecasted to surpass the 322 tons produced in 2009.