Australian sales of gold to China have surged a staggering 905.4% on the back of the Middle Kingdom’s efforts to short up its foreign currency reserves.
The Australian reports that the stunning year-on-year gain in gold sales to China for the period of January to August in 2012 has left the precious metal Australia’s second most valuable tangible export to the emerging Asian giant at AUD$4.2 billion in total, replacing stalwart commodities export coal.
The total value of coal exports for the same period also enjoyed impressive gains, up 79.9% year-on-year, yet clocked in at third place amongst Australia’s tangible exports to China at AUD$3.9 billion.
Fresh data from the Australian Bureau of Statistics also indicates that iron ore and concentrates remains far and away the country’s most valuable physical export to the Middle Kingdom, worth AUD$26.9 billion for the period from January to August of 2012.
This amount represent a 5.4% fall, however, compared to the same period in 2011, due to ailing demand from China which has driven spot prices lower.
Analysts believe the surge in sales of gold are the result of efforts by Chinese banks to raise their low level of foreign currency reserves of gold.
Gold demand amongst retail purchasers in China has also risen, with middle-class urbanites esteeming the precious metal a safe and profitable investment as real interest rates languish, PRC stocks remain weak, and a bursting of the property bubble looms on the horizon.