Chinese gold consumption could grow over the next two or three years to more than 2,000 tonnes per year, Frederic Panizzutti told delegates at the Dubai Precious Metals conference.
China consumed 813 tonnes of gold in 2014 but its economic growth is slowing – GDP growth last year of 7.4 percent was down from 7.7 percent in 2013, missing the government’s target of 7.5 percent and the slowest rate since 1990.
Still, MKS chief executive Panizzutti believes the country has untapped potential given that its per capita consumption rate is 0.65 grams compared with 4.94 grams in Dubai and 6.4 grams in Hong Kong.
“There is still a lot of progress possible and new demand that can be created,” he said.
While India currently vies with China as the world’s leading consumer of the yellow metal, China’s economic growth will outpace that of its Asian neighbour and from a larger base, Panizzutti argued.
India regained its status as the leading gold consumer in 2014, according to the World Gold Council, consuming 842 tonnes. But while the economies of India and China are both growing at around seven percent per year, this rate appears more sustainable in China, Panizzutti added.
Song Yuqin, vice president of the Shanghai Gold Exchange, was equally optimistic on the future of the Chinese gold market.
“I am full of confidence that the momentum is there and especially with the opening up of the Chinese market following the launch of the international board,” he said at the conference.
The International Board will open up the market to a large amount of new participants, thereby bringing more liquidity to the Shanghai market, he added.
(Editing by Mark Shaw)
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