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Slow, steady rise forecast for China gold
Last Updated(Beijing Time):2007-02-06 11:54

China's gold output is forecast to grow by single digits this year, the country's chief trade organization for the precious metal said yesterday.

"Gold production is expected to maintain stable growth at about five to six percent," said Zhang Yongtao, secretary general of the China Gold Association.

"New mines are being opened while some small facilities are being closed."

Production is expected to rise to between 252 and 254 tons this year, and to more than 280 tons by 2010, experts said.

China, the world's third-biggest gold miner, turned out 240.1 tons of the precious metal in 2006, up 16 tons, or 7.15 percent, from the year before, the gold association said.

The value of the China's gold output rose 34 percent to 52.92 billion yuan (US$6.9 billion) last year, and industry profits topped 6.1 billion yuan, up 51 percent.

Shandong, Henan and Fujian provinces are China's biggest gold mining sites, with Shandong accounting for a quarter of the country's total output.

China's annual gold production lags output in the United States and Australia by about 20 tons.

China is the world's fourth-biggest gold consumer, with purchases estimated at around 270 tons in 2006.

The country's appetite for the precious metal has expanded along with gold's growing position as an investment channel.

The Shanghai Gold Exchange has traded nine kilograms of 100-gram gold bullion since the product was introduced on December 25 for individual investors.

High prices, however, appear to have dampened small trades of bullion.

Average gold prices are expected to settle out at US$652.38 an ounce this year, about US$2 more than at present, according to a forecast by 29 analysts in a London Bullion Market Association report. Prices are expected to fluctuate between US$500 and US$850 an ounce throughout the year, analysts said.

Source:Shanghai Daily 
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