China's gold industry is expected to post a profit of 2.5 billion yuan in the first half of 2006, a year-on-year rise of 59 percent, according to a report from the National Development and Reform Commission (NDRC) released on Wednesday.

Profits are being spurred by rising gold prices and increased production. Over the first six months of the year the price of gold on international markets climbed from US$530 per ounce on January 1 to US$730 on May 12 before declining to US$614 on June 30.

The NDRC report shows China's gold production in the first half of this year is expected to reach 110 tons, up 12 percent over the same period last year.

Gold production in the first five months climbed to 88.8 tons, up 12.44 percent over the same period last year, while profits soared 58 percent year on year to reach 2.1 billion yuan, the report said.

The report predicted China's gold industry is likely to see a 10 percent increase in profits this year.

(Xinhua News Agency July 12, 2006)