Abney Associates comments on China’s mining associations latest statement reaffirming the world’s largest producer of Gold is poised to increase output by almost 10 percent this year to a record levels even as bullion prices slump.
July 26, 2013 - Gold output in China, the world’s largest producer, is poised to rise almost 10 percent this year to a record even as bullion prices slump, the nations mining association said.
“Gold’s role as a tool for wealth protection is still widely recognized in China,” Wang Jiahua, executive vice chairman at the China Mining Association said in interview in Zhaoyuan, Shandong province, on June 21. “The global economy isn’t out of the woods yet -- the European sovereign debt crisis hasn’t been solved and many still wonder if Abenomics in Japan will work, so gold’s downside should be limited, output may rise to as much as 440 metric tons.”
The country, which overtook South Africa as the largest producer in 2007, had output of 403 tons in 2012, according to data from the Beijing-based group, an affiliate of the Ministry of Land and Resources.
“We haven’t heard of any Chinese miners opting to lower production because of the gold rout,” said Le Yukun, head of metals and mining research at BOC International China Ltd. in Shanghai. “All we can see now is that the slump in gold prices will curb investor interest in gold-mining assets.”
Investors now look directly to the source to make profits as gold prices dropped by the most since February this year following announcements made by the Federal Reserve stating it may slow global market stimulus and its bond-buying program. The recent decline in value has had no bearing on buyer volumes in the world’s second largest economy as Chinese still fill the vast number of gold trader’s shops.
“China is set to surpass India as the largest consumer of gold for what I believe will be a few months as India adjusts to the new rulings of an 8 percent import duty and the Reserve Bank of India only allowing cash purchases. China will get a boost as regulators in Beijing make investing in gold much easier,” said Marcus Dawson the Head of Principle Investments from Abney Associates.
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Abney Associates Mining Group Set to Raise the Output Bar by