With deadlocked debt talks in Washington, gold remains firmly above $1,600 an ounce as nervous investors look for “safe havens”, writes Leslie Hook. But in China, the world’s second-biggest consumer of bullion, record nominal prices of the precious metal have raised eyebrows.

Normally enthusiastic buyers, the Chinese are starting to wonder if the price of gold could have gone too far. Over the past year, Chinese physical gold demand has soared, driving China’s gold imports to rise fivefold last year.

The key driver of this has been sales of gold bars, which are used for investment or given as gifts. In the first quarter of this year, gold bar sales more than doubled from 2010, making China the world’s largest buyer of bars and coins, according to the World Gold Council. But anecdotal evidence suggests that this week’s shiny prices have prompted some soul-searching among China’s gold bugs.