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Tuesday, 25th August 2009 (3302 views)

The rapidly expanding spending power of Chinese consumers together with soaring output from its gold mining industry are turning the country into one of the world's 'gold superpowers', an expert has said.

Writing for Money Show, Lawrence Roulston said China is currently mining and buying gold "as never before".

Gold output in the People's Republic has rocketed in recent years and in 2007, the country deposed South Africa as the world's number one producer of the precious metal.

With the Chinese economy continuing to grow at around eight per cent a year, consumers also have a "great deal of spending power", he added.

As a result, many are buying up gold pieces, with jewellery demand outpacing the rapidly-rising levels of domestic gold production.

These bullish conditions could benefit wider investment in gold and gold-related activities, Mr Roulston said.

At the moment, companies involved in gold exploration and development are being "warmly welcomed" by investors and these firms are set to be at the "leading edge" of the move towards higher prices.

According to the Production of Gold Survey 2009 by GFMS, China remained the world's top gold producer in 2008, with the United States moving into second place.

 

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