China's Boosting Gold Imports

China are boosting their gold imports to record heights this month as the weeklong Luna New Year is about to start as a 'hedge against financial turmoil'.

According to Bloomberg, 'Demand for gold is climbing in China as investors seek to protect their wealth against slumping property prices and equity markets amid an inflation rate above 4 percent. The nation overtook India in the third quarter as the largest gold jewelry market, according to the World Gold Council. The country is also the biggest producer.'

Currently, China's private gold savings is rivalled only by India but it seems not for long. As well as importing gold China is also digging more gold out of the ground and, significantly, not exporting it. Citizens are being encouraged to own gold and the Chinese government is very closed mouthed about how much gold they actually have. No reports of the gold bullion stocks have been issued by the chiense government for two years ago when it indicated it had 33.89 million ounces, or 1,054 tons, as of June 30, 2009.

Interestingly, just before the usual strong buying season of the Lunar New Year, the Chinese Government in Beijing shut down all gold exchanges with the except of the officially recognized Shanghai Gold Exchange and Shangai Futures Exchange. Is this an attempt to control the gold market in China and prevent gold from leaving the country?

"China’s appetite for gold is very strong and growing," said Tao Jinfeng, chief investment consultant at Haitong Futures Co., "The few months before the Lunar New Year is typically the peak demand period for Chinese people."

Of the 145,000 tones of gold in the world, China seems determined to ensure she has gets her share.

China's boosting of gold imports is another indication of the future gold price and yet another incentive to buy gold while the price is still low.