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High price won't halt mainland gold rush
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China'a gold sales are unlikely to be hit by global high-flying prices, according to industry experts.


They say Chinese will still buy during peak periods on expectations that even higher prices are on the way.


One person who shares this view is certainly in the know - Albert L. H. Cheng, managing director of World Gold Council Far East, a noted precious-metal consultancy.


Some domestic jewelers are even adding to their warehouses to prepare for the buying boom during the Spring Festival.


A GFMS report said earlier this year that the global demand for gold jewelry is expected to drop 20 percent in the first half due to the high prices.


The gold price topped a three-decade high earlier this year on concerns of inflation, geographic uncertainty, worries about a United States recession and a weak greenback.


Cheng concurs with an early-January assessment when GFMS said that "investor appetite for gold at the moment seems undimmed and this should push gold higher over the year."


Philip Klapwijk, Executive Chairman of GFMS, said in a January 17 release: "Predicting the top is never easy but we always thought the US$900 barrier could easily fall and then we have to start viewing US$1,000 as a clear possibility for later this year."


Gold prices cracked US$900 an ounce on January 11 in New York. On the home front, the concerns of inflation and the volatile stock market add to the investment attraction of gold as a haven, said Wang Lixin, China manager of the World Gold Council.


China's gold demand rose sharply last year, Wang said, declining to give details expected for release in February.


National gold sales in the second half still rose, while the Indian and American markets, two major avenues for gold jewelry sales, were hit by the rising second-half prices.


(Shanghai Daily January 24, 2008)


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