China’s Voracious Appetite For Gold

Early Chinese gold coins estimated around 2500 years old.

China’s emergence as an economic power house is still in it’s infancy. They are still in the cute baby stage where everyone  ooohs & aahhhhs over them.  What China displays today is just shadow of things to come in 2020 and forward as they overtake the US with the worlds largest economy.

Where gold is concerned China is number one in production as well as consumption.  These rankings shouldn’t normally raise eyebrows except their demand for gold far out-strips the production. China mines nearly 351 metric tons while consuming almost double that amount at 700 metric tons.  These are the hard numbers of Chinese demand and one of the pressures keeping the price of gold over $1500.

China should continue to absorb bullion imports and increase their demand as the economy continues to expand. It’s sort of like sending oil to Saudi Arabia, James R. Steel, a New York-based metals analyst for HSBC Holdings Plc was quoted in the WSJ.  To further China’s demand for the yellow metal an official in Shanghai told a conference of their intention to launch an ETF tracking gold. This would result in increased retail demand in China placing thousands of metric tons in vaults to cover these ETFs. Mr Steel was further quoted, There’s a saying, gold goes where the money is. Now gold is coming to China.

Gold will continue to have pressures of demand not just from China but through out the globe. We recommend continued acquisition of metals in your Tangible Asset Portfolio continuing to diversify your total net worth. The WSJ asked Mr. Steel where he thought the price of gold would go? I’m not authorized to say, but the price outlook isn’t the only consideration. To me, the real value of gold is as a diversifier.

Read the full story: WSJ – China’s Gold Intake: Like Sending Oil to Saudis

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