BEIJING, Jan. 19 (Xinhua) -- The appeal of gold as an alternative
investment is increasing in China as its price hits new highs and is forecast to
keep rising in the mid to long term.
Stimulated by expectations of U.S. interest rate cuts and soaring global
oil prices, gold reached an all-time high earlier this month. Citibank estimated
its price is expected to hit 1,000 U.S. dollars an ounce this year.
The strong upward trend has attracted individual Chinese investors such as
Yao Yun. The chief financial officer of a Shanghai-based foreign company bought
50,000 yuan (6,849 U.S. dollars) in gold bars and the price has risen by 12 yuan
per gram in just half a month.
"I believe the price will keep rising," he said. "The stock market is too
volatile, and the real estate sector is subjected to macro-control. Investing in
gold is a good choice at this time."
In Caishikou Department Store, a popular physical gold dealer in Beijing,
more than 100 people lined up to purchase bullion for the Lunar Year of the
Mouse on Nov. 22, the first trading day of the products. More than 200 kilograms
of the gold bars were sold within 1.5 hours. Moreover, the total subscription
amounted to two tons.
Li Xiang, a manager of the department store, said sales of gold products
surged more than 50 percent to 2.38 billion yuan in 2007.
Zhongjin Gold Cooperation Limited, a leading gold products manufacturer in
the country, said its bullion sales had kept a steady growth of 50 percent
month-on-month since July.
Paper claims to physical gold, which allows customers to use money in their
bank accounts to virtually buy and sell gold at global prices, are also
appealing to more domestic investors as well as speculators.
Recent figures from the Bank of China (BOC) Shanghai branch show that the
transaction volume of "paper gold" reached 140 million yuan last week, 30
percent higher than in the flat period before gold started rising.
"Paper gold has entered the vision of more individual investors recently
because of the wide range of price fluctuation," said Xu Ming, a gold analyst at
the BOC Shanghai branch.
China Gold Association statistics revealed that gold investors nationwide
have exceeded 1 million. The number doesn't include speculators of gold futures,
which made a strong debut in Shanghaion Jan. 9.
On that day, China gold futures contracts surged to the daily 10 percent
limit minutes after trading started at 9 a.m. on the Shanghai Futures Exchange
(SFE). More than 6,000 clients traded on the market.
Experts believe the China gold futures market will grow into a leading
global market as it was launched at a time when international gold prices have
repeatedly been hitting new highs. Global prices jumped more than 30 percent
throughout last year, representing the biggest increase since