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Politics : Gold and Silver Stocks and Related Commentary -- Ignore unavailable to you. Want to Upgrade?

To: goldsheet who wrote (1048)	12/19/2004 1:08:21 PM
From: loantech	Respond to of 18308

Bit of a demand getting stirred up: thestandard.com.hk New golden era dawns for mainland Lucy Hornby December 20, 2004 It took the Caishikou department store just hours last month to run out of gold bars stamped with a Year of the Rooster motif, so Beijing's top gold retailer asked customers to register by phone for a second round. Nearly 3,000 did, salesmen said. In China, gold is back in vogue. The country's growing urban middle class is lining up to cash in on a spectacular 30 per cent rally in the precious metal's value over the last two years to a 16-year peak on December 2. The rise is partly because the United States dollar, long China's hard currency of choice, has dived nearly 30 per cent over the same period. Mainland investors have about 225 million yuan (HK$212.01 million) saved in gold, state media say. That is a drop in the ocean compared with total savings of US$1.3 trillion (HK$10.14 trillion), but a sea change from when gold hoarding was forbidden after the communists took power in 1949. Gold exports are still banned, but a thriving home-grown market now allows relatively free trade. In line with late leader Deng Xiaoping's recognition that ``to get rich is glorious'', the Shanghai Gold Exchange opened in 2002, reviving memories of the city's status as a gold trading hub in the 1930s. Some 235.35 tonnes changed hands on the exchange in 2003, and 170.04 tonnes in the first half of this year alone. The Bank of China, the nation's premier foreign exchange lender, jumped into the fray a year ago, offering ``paper gold'' certificates to Shanghainese. Account holders use them to buy and sell gold held by the bank. On Friday, the bank - which has handled about 2.3 million grams of paper gold transactions so far - announced it would expand the programme to the rest of China. ``Shanghai is relatively rich, so we launched here,'' a gold specialist with the bank said. ``When it first started, we got a lot of interest from people in Shanghai and other cities, calling to see how they could buy,'' she said. ``The investors are fairly savvy. They see very quickly how they can make money with this.'' Analysts see China's consumption of gold growing at most 6 per cent annually in the next year or so, but growth would be in double digits by the end of the decade. Consumption is still about a tenth that of the US. Per-capita consumption is 0.16 grams on the mainland, against 2.7 grams in Hong Kong and 1.42 grams in the US, JPMorgan global metal strategist Jon Bergtheil said. But as incomes rise alongside red-hot economic growth rates in excess of 8 per cent, China could tighten the global supply-demand balance.