China Merchants Bank has signed an agreement with Kingold Jewelry, a China-based manufacturer of 24-carat gold jewellery and ornaments, to introduce 24-carat gold investment related products in the country.

The 24-carat gold investment products, usually in the form of gold coins and bars, will be made available through China Merchants Bank's retail banking network across China. In a statement, Kingold said the products are designed to tap into Chinese clients' affinity for gold as a store of wealth. The products are expected to deliver meaningful returns to overall revenue by the second half of 2011, the firms said.

Investors are increasingly being drawn to gold as a viable investment option after some alternative assets proved themselves resilient at the height of the global financial crisis, not to mention current fears of inflation. According to the World Gold Council, China records the highest consumer investment demand for gold worlwide, totalling 579.5 tonnes in 2010. Along with India, the country accounts for 51 per cent of global gold demand for investment and jewellery.

Kingold's contract with China Merchants Bank will automatically renew in December 2011, absent specific objections by either party.