Demand for gold in China jumped in the first quarter to hit a record high, as inflation concerns an constrictions in the Chinese real estate marketed weighed on the nation.
That went against the grain of other nations like India, where gold demand for jewelry plunged by 19 percent; although that was caused largely by the Indian government announcing they were going to raise duties on imported gold bullion and non-branded gold jewelry.
As for gold demand around the world, it dropped five percent in the first three months of 2012 to 1,097.6 tons, according to a report from the WGC.
That was largely the result of less demand in the jewelry and technology sectors, as gold prices soared 22 percent year-over-year.
Investment demand helped to overcome some of that, as did central banks increasing their gold inventories.
With overall gold demand in India plunging 29 percent, China continues to be the top consumer of gold for the last couple of quarters. Consumer demand for gold in the Middle Kingdom rose 10 percent to 255.2 tons in the second quarter. India's gold consumption came in at 207.6 tons.
As for ongoing gold demand in China, the said this: "Further growth is expected: investors remain wary of high inflation rates; and property market restrictions continue to drive demand for gold among investors seeking access to real assets."
Gold coins and bars led the way as far as percentages go, as demand climbed 13 percent for the year to 98.6 tons. Gold jewelry demand rose to 156.6 tons, a gain of 8 percent. China gold jewelry consumption now accounts for 30 percent of the global jewelry market.
The WGC said it expects gold jewelry demand in China to slow down some as market growth in China moderates and the overall economy matures.
Showing posts with label India Gold. Show all posts
Showing posts with label India Gold. Show all posts
Thursday, May 17, 2012
Saturday, April 10, 2010
China and Future of Gold
There are so many interesting things that China brings to the table reference to gold in the years ahead, it's hard to know where to start.
For example, they are unique in the world other than their neighbor India for the consumption of gold as jewelry, which will probably actually bring demand for use of the metal beyond investment, and to a lesser degree, industrial uses.
Although India has always had the demand for gold, it wasn't near enough to make a difference in normal economic times, so that was never really a factor. But add millions of Chinese to the retail gold market, and it has a lot of potential to move gold for years to come, although that has yet to play out to see what type of level that will be.
One thing for sure, the Chinese like gold jewelry, and with the growing middle class with money to spend, there will definitely be a huge increase in demand, but again, we have to wait until that plays out going forward.
Estimates from the World Gold Council have Chinese gold consumption doubling over the next decade, so that's not an insignificant amount.
The same thing with investment demand from China. The Chinese have been encouraged to acquire physical gold, and gold investments in other areas as well, increasing the support and foundation under gold in a way we may have never had before. That means we're entering into uncharted territory for demand, and even in healthy economic times that could be a factor in shoring up gold at a much higher price level.
Industrial demand isn't that much of an element in the price of gold at this time, and even with the huge Chinese market it's hard to see that being a big part of the gold demand picture.
All taken together, this is a major shift in gold, and as India continues to create a larger middle class with more spending power, we'll see gold jewelry demand grow there too, probably along with investing in gold. It will demand on how high the price of gold will go and how much the people in the middle class have to spend.
Either way, China is leading the way in gold, and there can be no doubt the way we viewed gold in the past several decades has changed forever, and it's anyone's guess how far it'll go, especially as people increasingly consider it a currency; something that hasn't happened in a long time.
For example, they are unique in the world other than their neighbor India for the consumption of gold as jewelry, which will probably actually bring demand for use of the metal beyond investment, and to a lesser degree, industrial uses.
Although India has always had the demand for gold, it wasn't near enough to make a difference in normal economic times, so that was never really a factor. But add millions of Chinese to the retail gold market, and it has a lot of potential to move gold for years to come, although that has yet to play out to see what type of level that will be.
One thing for sure, the Chinese like gold jewelry, and with the growing middle class with money to spend, there will definitely be a huge increase in demand, but again, we have to wait until that plays out going forward.
Estimates from the World Gold Council have Chinese gold consumption doubling over the next decade, so that's not an insignificant amount.
The same thing with investment demand from China. The Chinese have been encouraged to acquire physical gold, and gold investments in other areas as well, increasing the support and foundation under gold in a way we may have never had before. That means we're entering into uncharted territory for demand, and even in healthy economic times that could be a factor in shoring up gold at a much higher price level.
Industrial demand isn't that much of an element in the price of gold at this time, and even with the huge Chinese market it's hard to see that being a big part of the gold demand picture.
All taken together, this is a major shift in gold, and as India continues to create a larger middle class with more spending power, we'll see gold jewelry demand grow there too, probably along with investing in gold. It will demand on how high the price of gold will go and how much the people in the middle class have to spend.
Either way, China is leading the way in gold, and there can be no doubt the way we viewed gold in the past several decades has changed forever, and it's anyone's guess how far it'll go, especially as people increasingly consider it a currency; something that hasn't happened in a long time.
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