Apparently its not just the US, the Middle East, and Europe Scrambling for gold, but also China, according to a recent article in the Shanghai Daily.

Investors going for gold as a safe haven

By Zhang Fengming  |   2008-11-20  |     NEWSPAPER EDITION

DEMAND for gold in China rose 18 percent in the third quarter as consumers turned to the precious metal as a safe haven for their cash, the World Gold Council said yesterday.

Demand rose to 109 tons in the third quarter, the majority of which is attributed to a strong rise in the Chinese mainland, the council said yesterday, citing figures complied by researchers GFMS Ltd.

Demand from the mainland rose 20 percent to 99.8 tons. In Hong Kong it increased 7 percent to 3.8 tons while demand in Taiwan shrank by 6 percent to 5.4 tons.

China’s gold jewelry demand grew 9 percent to 92.5 tons in the quarter as sharply lower prices persuaded consumers to overcome their reluctance to spend in the gloomy global economic environment.

Gold prices hit a yearly high of more than US$1,000 an ounce in March and then fell to the current US$740.

The retail investment market was particularly animated in China and demand from the segment more than doubled to 16.5 tons as gold’s safe-haven status appealed to investors in a time of financial crisis.

Over the next quarter, the outlook for gold across China is mixed, the council said.

The arrival of the Chinese wedding season may provide some support for jewelry purchases, particularly if the gold price steadies at the lower levels seen in recent weeks. However, the global economic slowdown is also likely to restrain consumer spending on gold jewelry.

Investment demand, however, is likely to benefit from continued uncertainty.

The strong rise in demand from China, India, Middle East and Indonesia has boosted global gold demand in dollar terms to a quarterly record high. Dollar demand for gold reached an all-time quarterly high of US$32 billion in the third quarter. That was 45 percent higher than the previous record in the second quarter.

“Gold’s universal role as a store of value has shone through during this quarter helping attract investors and consumers to all forms of gold ownership. The rise in demand for gold bars and coins has been impressive as has the record rise in gold ETF (exchange traded fund) inflows,” said James Burton, chief executive officer of the World Gold Council.

http://www.shanghaidaily.com/article/shdaily_sing.asp?id=381278&type=Business&page=0

Last 5 posts by Alex Stanczyk

• Sprott: US Gov Dead Man Walking - October 21st, 2009
• Bank of England Governer: Regulation can not stop bank failures - October 21st, 2009
• Dollar Dead-Pool - October 15th, 2009
• Barclays: Gold can go to $1500 - October 7th, 2009
• Gold passes $1040 – Silver Passes $17 - October 7th, 2009