China Mineral Company Sees Positive Outlook for Gold Prices And Profit Outlook

Online, July 6, 2010 (Newswire.com) - Hong Kong- China Mineral Company reports that China's consumption of gold is soaring alongside the price, as the Asian economic superpower and its citizens increasingly turn to the precious metal as a way to diversify their finances.

"Gold prices have risen so quickly - 11.6 per cent in the last quarter alone and 84 per cent in the past three years - that it is becoming out of reach for some of the world's jewelry buyers and investors" said Greg Kelly, a senior gold analyst at China Mineral Company stationed in Hong Kong.

Kelly goes on to say "Yet even at about $1,200 (U.S.) an ounce, Chinese demand from both is soaring. The retail investment demands in China rose 57 percent in the first quarter of this year from a year ago, while jewelry demand increased 11 percent."

Chinese gold consumption was worth more than $14-billion (U.S.) last year, which accounts for about 11 per cent of global demand. China is already the world's largest gold producer and, with estimates of demand doubling before the end of the decade, it may not be long before it surpasses India as the world's largest buyer.

And gold has a powerful ally in promoting it: the state. China's heavy push to diversify, and invest in its mineral wealth through companies like China Mineral Company, and similar others, the State and companies in business with the government are all looking to make more than expected from the rising prices of gold.

The country is also turning to television advertising to encourage its growing middle class to buy gold as an investment. State-owned China Central Television has run spots urging citizens to buy gold, silver, as well as invest in the mining companies within the country. China Mineral Company is helping in the populous' major shift from only a few years ago when the country imposed strict controls on precious metals purchases for its citizens.

China has also been ramping up its gold reserves and hopes to increase future holdings through unique agreements such as the one signed in 2007 with China Mineral Company.

"Over the past five years, demand for gold has risen by an average of 13 percent a year in China, which has caused Chinese gold mining producers to step up gold production by 84 per cent over the past decade" said Greg Kelly of China Mineral Company.