gold jewelry

Prominent gold experts and officials are urging the China government to lift the ban on individual trading in the precious metal as soon as possible, as quoted prices at the Shanghai Gold Exchange (SGE) continually hit record highs this month amid a surge in buying enthusiasm. About 20 per cent of respondents to a recent national survey said they were willing to spend 10 to 30 per cent of their savings in gold investment, indicating a huge potential demand for gold jewelry. When China's foreign exchange reserves grow to US$400 billion and the ratio of gold in the reserves is brought to 5 per cent, according to Merrill Lynch, a new demand for 122 tons of gold will result. Gold comprised just 2.6 per cent of the US$286 billion worth of reserves at the end of last year. For thousands of years, the Chinese have traditionally saved gold and worn gold jewelry. If the government does decide to allow individual investors into the sector, the landscape of the entire gold industry worldwide could change completely. Outstanding individual bank savings in China hit 10.61 trillion yuan (US$1.28 trillion) at the end of July. After trying in vain for years to encourage a high growth rate in private spending, China has had to rely on proactive fiscal policies, marked by heavy government investment since the Asian financial crisis in 1997, to maintain fast gross domestic product growth.