Last week, the China Gold Association released data indicating that the total consumption of gold in the country in 2021 increased by more than one-third from 2020 as the country’s economy rebounded from the COVID-19 impact.
In this latest report, consumption of gold in the country increased by 36.5% year on year, hitting roughly 1,121 tons. It had also risen by 11.8% when compared with the total gold consumption figures from 2019. A previously released industry report showed that the country’s gold consumption had risen by almost 49% from the year before to reach 813 tons during the first three quarters of 2021. China is the biggest consumer of gold globally.
In this report, the China Gold Association stated that domestic gold consumption in the first nine months of 2021 was 5.9% higher than the 2019 pre-coronavirus January–September level. Analyst Zhu Yi stated that domestic gold consumption in the country was on a recovery course during the first three quarters of 2021 as the precious metal found increasing acceptance as an option for investment. Yi noted that the metal had a safe haven appeal in the midst of geopolitical tensions caused by expanding global supply of money and low-to-negative interest rate environments.
In its latest statement, the country’s Gold Association stated that last year, domestic consumption of gold maintained a recovery trend under the impressive results of China’s overall epidemic prevention and control and economic development, and achieved swift growth. This was in comparison to the same period in 2020.
Growth in the country’s consumption of gold was led by gold jewelry, which rose by almost 45% to reach about 712 tons year-on-year. The consumption of gold coins and bars also jumped 26% last year, to reach about 313 tons.
The demand from jewelers and retail investors buying gold coins and bars is expected to rise. The country’s economy rebounded in 2021, its best growth in about a decade. This rebound was boosted by strong exports in a post-COVID-19 lockdown comeback.
The China Gold Association also noted in its statement that its 2021 gold output fell by about 9% year on year, to reach 328 tons. The drop in output was caused by the shutdown of various mines in some of the major gold-producing provinces in the country, including Henan and Shandong. Activity in the mines was stopped after some mine accidents occurred, leading the relevant authorities to cease operations in order to rectify the issues and conduct safety inspections.
This spike in the amount of gold used in China sends bullish signals to extraction companies such as StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) whose work it is to meet the demand for this precious metal.
NOTE TO INVESTORS: The latest news and updates relating to StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) are available in the company’s newsroom at https://ibn.fm/STUPF
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