By Daily Crux Editor Sean Goldsmith:

Investors in China, the world's second-largest gold consuming country, are stepping up purchases of physical gold as a hedge against economic disaster... "Gold demand in China in the first quarter rose to 114 tons, up 2 percent over the same period last year, solely boosted by an increase in jewelry demand," according to the latest report from the World Gold Council.

Chinese investors are taking a cue from their government, which increased its gold reserves nearly 76% to 1,054 tons since 2003, and will likely continue buying as the dollar continues its death spiral and the renminbi becomes more internationalized... "China's gold reserves may serve as backing for the yuan as Beijing is stepping up the promotion of its use overseas," said Albert Cheng, director of the World Gold Council's Far East Division.

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More on Chinese gold investment:

China's big gold secret is out: Quietly building huge hoard since 2003