The gold price will remain high in the future market when the supply can not meet the demand, said Hou Huimin, vice chairman of the China Gold Association.

   Hou made the remark when attending the 5th Shanghai Derivative Market Forum on May 28.

   Due to the continuous decrease of gold production in South Africa and the United States, the world's major gold producers, the gold supply will present a trend of small and stable drop in the years to come, while the gold for demand caused by US dollar devaluation and inflation keeps growing.

   The international gold price broke 1,000 US dollars/ounce in March of this year and it still stood around 920 US dollars/ounce recently. Now the market's demand for gold for sheltering risk keeps rising as the US dollar continues to be weak and the global inflation pressure increases.

   According to Hou, China's gold purchase and consumption keep climbing. The gold consumption in China including Hong Kong and Taiwan, set a historical high of 364.3 tons in 2007, up 23 percent over the previous year. In the mainland of China, gold consumption showed a trend of strong growth, hitting 326.1 tons in 2007, jumping 26 percent over 2006. Among this, the demand for gold for jewelry use accounted for 302.2 tons, breaching 300 tons for the first time in the past 10 years. China thus surpassed the United States to become the world's second largest gold jewelry market, just next to India.

   The Shanghai Gold Exchange reported a total gold transaction volume of 1,828.13 tons last year, up 46.3 percent year on year and also the highest record since its establishment.