Gold consumption increases by 26 pct in Q1

China consumed a total of 320.54 tons of gold in the first quarter, surging 25.6 percent year-on-year, according to a report released by the China Gold Association Tuesday.

In the first quarter, China produced 89.91 tons of gold - an 11.26 percent increase over the same period last year, according to the association.

"The big increase shows that Chinese consumers have strong demand for gold products," Zhang Bingnan, secretary-general of the China Gold Association, told the Global Times Tuesday, noting that the growth rate in the first quarter was "reasonable and healthy."

Zhang said that as gold prices have remained at a low level since the beginning of this year, demand in China will continue to surge in the second quarter.

"Increasing gold reserves can help the country to weather financial risks," Zhang said, noting that the State gold reserves as well as private gold holdings in China are considerably lower than the world average at present.

Recent media reports have said that housewives in China have bought 300 tons of gold in the last two weeks of April, encouraged by low gold prices, and the overall increase in Chinese demand prompted a rebound in international gold prices in April.

"The recent increase in gold demand is a worldwide phenomenon. 'Chinese housewives' are not the only reason behind the recent rebound - other places in the world such as Mumbai, Dubai and New York also reported major increases in gold purchases," said Zhang.

International gold prices have risen by 7 percent since April 15 to around 290 yuan per gram. The prices are likely to see fluctuations in the short term, Zhang said, but they will remain strong in the long run.