World's largest gold producer, China witnessed record surge in gold trading during the first half of this year.

According to Shanghai Gold Exchange, domestic investors' gold frenzy pushed trading volume of the yellow metal to an historic high in the first half of the year, with gold imports also surging to a record.

China's gold price increased 25.2 percent in the first half of 2010 to reach an average of $37.16 per gram.

Turnover in gold traded at the Exchange was up 58.7 percent at 3,741.5 tons in the first six months of 2010, in which spot goods volume reached 834.6 tons.

Individual accounts in the Shanghai Gold Exchange reached 918,500 by the end of 2009, more than double the figure from a year earlier. The total turnover by individual investors was almost six times higher to 438.5 tons.

The exchange's combined trading volume in 2009 stood at 4,710.8 tons, worth 1.03 trillion yuan.

The global gold price rose 26 percent to $1,152.2 per ounce on average in the same period, driven by growing demand amid concerns that the debt crisis in Europe and the shaky economic recovery in the United States would drag the euro and the dollar down further.

Analysts said investors' appetite for gold to hedge against inflation risks also led to huge growth in China's gold imports in the first half, when the imported amount approximately equalled the total volume in the past three years.

China is the world's largest producer of the yellow metal, with an annual output of around 280 tons, and is the second-largest consumer of the metal after India.

World Gold Council said China's total demand for gold - for both jewellery and investment - reached 423 tons in 2009.

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