China to surpass India in Gold consumption this year: Deutsche Bank
Mainland China is poised to overtake India as the world’s largest consumer of gold, said Deutsche Bank in a special report.
Asian demand in particular has grown dramatically, where China is expected to become the world’s largest buyer of gold as soon as this year, the German bank added.
“We would argue that China’s long-term strategy on trade and finance likely includes a definitive position on gold. Given the possibility that China’s could be the world’s largest economy in the second half of the century we expect that at some point over the long-term the RMB may be in a position to challenge the USD as the world’s reserve currency,” the German bank added. “If this is envisioned by the PBOC we would expect that in preparation for such an event and to support reserve currency legitimacy in the eyes of its trading partners, the country (China) may see a stock-pile of gold rivaling that of the US as a requirement. On this basis we would expect that China could be quietly building its gold reserves,” they added. (Commodity Online)
From the charts below if China is to have gold reserves equal to that of the USA then they have a massive task ahead.
And China will not be able to amass enough gold to equal the USA’s reserves by production meaning that it will have to buy massive amounts of gold over the next few decades.
Gold Production by Country 2011 -2012