Chinese gold crafter Kingold Jewelry aspires to double the size of its market share within a three-year period, Bloomberg reports.
The driver of the widening production is heightening demand that finds its base in preoccupations about inflation. The Bank of Communications and China Merchants Bank have signed on to vend the company's 24-karat gold investment products, according to Jia Zhihong, the company's chair and chief executive officer. Kingold is based in central Hubei province.
"We're targeting a 10 to 15 percent market share in three years," he told the news service. "Gold prices may continue to rise amid global unrest and people are seeking havens against inflation. As higher material costs erode profit margins, we will expand production of gold bars and coins to offset that."
Kingold last year captured 6.5 percent of the gold market.
Demand for gold in China last year climbed to 560 tons, 400 of which were used to manufacture jewelry. Gold bullion production last year grew 8.6 percent to 341 tons.
According to a company statement, net income surged to $5.3 million during the first quarter of 2011, representing a 34 percent increase.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.