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China's gold production climbs more than 13% in 2022

Kitco News

(Kitco News) China stepped up its gold production in 2022, with the China Gold Association (CGA) noting an increase of 13.09%, Xinhua News Agency reported.

The world's top gold producer and consumer saw its gold output total 372.048 tonnes in 2022, according to the CGA data. The production climbed by 43.065 tonnes from 2021.

China's gold consumption declined by 10.63% in 2022, coming in at 1,001.74 tonnes, the CGA data revealed.

The demand for gold jewelry fell 8.01% to 654.32 tonnes year-on-year. Meanwhile, the gold bar and coin demand tumbled by 17.23% and dropped to 258.94 tonnes from 2021.

Last year's shutdowns in China and the country's zero-COVID policy weighed on demand, according to the report.

Gold priced in yuan on the Shanghai Gold Exchange rose 4.53% in 2022, trading near 390.58 yuan (USD 57.58) per gram, the CGA pointed out.

This was in contrast to gold priced in U.S. dollars, which ended the year flat. The precious metal saw fluctuations of about $450 throughout 2022. The yellow metal kicked off the year strong by rallying above $2,000 an ounce in the spring. Then it hit the lows near $1,630 an ounce in the fall. Gold ended up finishing the year at just above $1,822 an ounce after starting at around $1,828 an ounce.

China's biggest publicly traded brokerage, Citic Securities, is looking at gold hitting record highs this year, citing central banks' gold buying as one of the most reliable bullish signals. 

One of the central banks that surprised the gold market at the end of last year was China. The People's Bank of China purchased 32 tons of gold in November — its first officially recorded purchase since September 2019. That was followed up with another purchase of 30 tons of gold in December. China's gold reserves now total 2,010 tons.

"Purchases by global central banks are one of the most reliable indicators signalling gains in bullion prices," said Ao Chong, an analyst at Citic Securities in Beijing. "Gold prices are expected to retain momentum and will be underpinned by easing expectations about the Fed's interest-rate increases, the continuation of geopolitical conflicts and economic recession."

The latest customs data also revealed that China imported more gold from Switzerland last year and stepped up gold purchases from Russia.

Swiss exports of gold to China were at four-year highs in 2022, with China buying 524 tonnes of gold worth around $33 billion, according to Swiss customs data. This is a massive increase from 354 tonnes reported in 2021 and the most since 2018.

China also bought 6.6 tons of gold from Russia in 2022, which is an increase of 67% from 2021, local Russian media reported. 

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