China 2012 gold output up nearly 12%: report

GOlD RUSH::China’s gold prices dipped in December last year as worries over the US ‘fiscal cliff’ caused uncertainty, according to the Ministry of Industry

AFP, SHANGHAI

Mon, Feb 25, 2013 - Page 15

Gold production in China, the world’s second-largest market for the precious metal, surged nearly 12 percent year-on-year last year despite a slowdown in the domestic economy, state media reported.

Output rose to 403.1 tonnes last year, up 11.66 percent from 2011, Xinhua news agency said on Saturday, quoting figures from the Chinese Ministry of Industry and Information Technology.

China is the world’s second-largest consumer of gold after India. A global industry group, the World Gold Council, has put China’s consumer demand for gold at 776.1 tonnes last year, flat from 2011.

The council attributed the stable Chinese demand to a slowdown in the domestic economy and consolidation in gold prices which discouraged investors, according to its latest report released this month.

China’s economy — the world’s second-largest — grew at its slowest pace in 13 years last year, expanding 7.8 percent from the year before.

However, the economy has been showing renewed vigor since late last year, with growth accelerating in the final three months of last year to 7.9 percent, snapping seven straight quarters of weakening expansion.

“The signs of economic improvement bode well for gold demand in China, although the indications are for a steady firming of demand rather than for strong growth,” the World Gold Council said.

China’s Ministry of Industry said domestic gold prices dropped in December last year as worries over the US “fiscal cliff” caused uncertainty.

US lawmakers clinched a last-gasp deal to avoid the fiscal cliff of tax hikes and spending cuts.

China’s gold producers recorded a combined 35 billion yuan (US$5.6 billion) in profits last year, up just 4 percent from 2011, the ministry said.