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China Wants to Double its
Gold Consumption in 3 Years!

It's commonly known that China is a major buyer of gold and also the fact that the communist country is the biggest producer of this precious metal.

The government is periodically buying gold and gradually avoiding the usage of US dollars. Obviously, the Chinese are reducing the risk that the US currency poses to them.

China's Ministry of Industry and Information Technology had announced in late 2012 that gold consumption in the country will be double of national gold production by the end of 2015. This is more than double when compared with the gold consumption forecast for 2012.

According to the same Ministry, domestic demand will pass the 1,000 metric tonnes level by the end of 2015.

The government wants to strengthen the domestic gold production industry and will therefore take appropriate measures. An increase of gold production is expected, despite cutting down from approximately 700 gold producing companies to 600 until 2015.

The government is stimulating gold production and therefore, the top 10 gold producers are expected to reach the 260 tonnes per year mark by 2015 (which is more than double when compared with the approximately 100 tonnes in 2012).

Obviously, the increasing demand will push prices higher. But let's not forget that if production increases, then it might even have a negative effect on gold prices - if demand will not rise in the same pace with supply, prices would not rise significantly.

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