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Inflation risk is driving "explosive" buying of physical gold in China, putting the country on a path to becoming the world's number one gold consumer and driving demand for the yellow metal to a 10-year high.
Chinese demand for gold bars and coins reached 180 tons in 2010, up a whopping 70% from 2009, Albert Cheng, the World Gold Council's managing director for the Far East, said at a news conference last Thursday.
Chinese demand for gold jewelry hit an all-time high of 400 tons in 2010, the WGC said.
China was the "strongest market for investment demand" in gold last year, Cheng said while discussing findings released in the 2010 Gold Demand Trends Report. He added that Chinese gold demand nearly tripled in the last 10 years to around 600 metric tons – and that it may double again in less than a decade.