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Perth Mint taps China’s golden appetite

Photo credit: ECU Daily

Photo credit: ECU Daily

Andrew Fewster, ECU Reporter

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The Perth Mint is taking advantage of China’s booming gold market, with exports growing to $11 billion last year.

The growth has come quickly, from 110 tonnes in 2011 to 232 tonnes last year, with a growth of more than 8% last year.

Despite China being the world’s largest gold producer, the Chinese market is demanding more gold.

Much of the demand is being driven by investors, with bar and coin demand up by 56% on last year’s figures.

Haywood Cheung, president of the Chinese Gold & Silver Exchange Society, said in an interview with Bloomberg that it will be a “good year” for Chinese gold imports.

“People are looking at other means to invest, a safe haven to protect their renminbi because of the depreciation, so everybody starts to look for safe haven products,” he said.

Government restrictions on property markets in major Chinese cities have reduced enthusiasm for investors in the property market.

Along with the depreciation of the Yuan this has led to more investors buying into gold, with more than 100t per quarter over the last two quarters being purchased.

This is where the Perth Mint comes in.

As the first foreign refinery accredited on the Shanghai Gold Exchange, the Perth Mint has been able to tap into a market demanding more gold.

Chief Operating Officer David Woodford believes there is a good opportunity to capitalise on the high demand for gold.

“Today we are on track to achieve our goal of becoming the biggest source of imported gold in the Chinese market and that is great news for Australian gold producers and Australian mine workers,” he said.

“We are focused on promoting the Australian gold industry to the world to build long term markets which will bring real benefits to Australian producers and workers for decades to come.”

Mr Woodford also discussed opportunities created by opening up direct distribution networks with Chinese banks, as well as other international banks operating throughout China.

“Our direct relationships with the banks have enabled us to lift our sales volumes and we are confident this market will continue to grow,” he said.

A World Gold Council report describes the Chinese gold market’s development as “solid, on-going and for the long term,” and predicts many years of growth in the area.

“China has become the most important physical gold market in the world,” the report continues.

“It is both the number one producer and consumer of the precious metal. And the country is the world’s largest bullion importer.”

The report also says that a rise in real incomes and “the traditional appeal of gold to the Chinese people” will also contribute to maintaining a steady rise in demand.

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Perth Mint taps China’s golden appetite