WGC calls on China to play broader role in world's gold market

China has now become the world's largest gold consumer and China can play broader role in the gold market, Aram Shishmanian, the CEO of the World Gold Council (WGC), said in an exclusive interview with the China Fortune Media Group.

Shishmanian said that the value of gold could be found in various areas, such as decoration, investment, insurance, and industrial raw materials. The value of gold has been preserved throughout time.

Aram Shishmanian, CEO of the World Gold Council, speaks at the World Gold Council on July 25. (Photo by Li Lin/China Fortune Media)

In ancient history, gold signified power and love, and it had been used as currencies. In recent history, gold has also played various extraordinary roles in our society. Its metallurgical qualities have seen many uses. Innovations around the technical applications of gold have increased significantly. Whether it is in satellites, which go into outer space, cancer detection, water purification, gold is partly utilized in these industrial sectors. Central banks around the world use gold to protect their nations' economy as well as giving confidence to their currencies. Investors are increasingly including gold as part of their portfolios to mitigate financial risks globally. Shishmanian noted,,"if things do not go well, you can always turn to its constant value."

"The gold market has shifted from the West to the East, and this process was driven by the demands from investors, consumers and central banks," Shishmanian said. "Nowadays, China has become the largest gold consumption and producing country in the World. It is undoubtly true that China will play a broader role in the World's gold market."

"The next step for China is to discuss the topics below: How China could better integrate into the World's gold market; How gold can support the internationalization of the RMB and How China can play a bigger role in the World's gold market in the future." Shishmanian underlined.

Central banks around the world have strived towards de-dollarization these days and also how to increase their foreign reserves. Shishmanian added, "As part of the currency systems, gold will play a significant role in central banks reserves."

Shishmanian advised potential individual buyers of gold investments to lay it aside for about ten-years, as a long-term investment. "However, if you want to buy gold as a tool for speculation, please do not buy it. If you look at the gold price over a short period of time, a quarter or a year, of course, the gold price would slip, but in the long run, gold does not underperform when compared with the US stock market. The value of gold is to safeguard your wealth. Gold can not be printed like other currencies; it cannot be politically manipulated, and also there are no counterparty risks. When financial crises come and currencies depreciate, the value of gold will be significant."