China Holds the Keys to the Gold Market
Frank Holmes | Apr 28, 2014 04:28PM ET
Last year China’s private-sector demand for Gold reached a record level of 1,132 tonnes, and according to the World Gold Council (WGC), the Asian nation could easily dominate the gold market once again, as they predict demand growing 20 percent by 2017.
This updated projection from the WGC confirms what
I wrote how Switzerland released its gold trade data this year for the first time since 1980. Only through these alternate reports can we infer the amount of gold China truly holds.
No matter the exact amount of gold that China has, this country is a good example that the demand drivers for gold remained the same. People around the world react with concern over government policies that can devalue currencies, thus making gold attractive. Similarly, as economies flourish and people have money, they will spend it on gold. The Love Trade will also continue; consumers will purchase gold as gifts as long as cultural celebrations and religious traditions carry on.
It’s important to follow the money, or in this case the gold, to see how people around the world react to this rare commodity. Looking forward, stay curious as an investor and you’ll see if China can keep the key to the gold market.
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