Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

China Gold Demand Surges as Chinese Investors Diversify

Commodities / Gold & Silver May 23, 2008 - 08:29 AM GMT

By: Mark_OByrne

Commodities Gold  was down 1% ($ 9.50 to $9 18.10 )  but silver  remained firm and closed marginally lower  ( down $0.06  to $17.9 2 ) and profit taking on oil's weakness was seen by many as the primary cause of yesterday's sell off . Gold  traded sideways in Asia but has rallied in early trade in Europe. 

With increasing doubts about the sustainability of the recent rebound of the dollar and of global stock markets, safe haven demand for gold is likely to reaccelerate in the coming weeks.


The dollar has not shown any direction this morning and oil has rebounded somewhat after yesterday's sharp sell off and this is leading to a lack of direction in the gold market in trading in London.

Today's Data and Influences
Today ,  the focus will  return to the  US housing market with existing home sales for April due for release this afternoon . The data is expected to confirm continuing serious difficulties in the U.S. housing market which is likely to lead to a continuing contraction in GDP growth with obvious implications for the dollar and US economy.

China Gold Demand Surges as Chinese Investors Diversify
While the World Gold Council confirmed an expected decline in demand for gold in the first quarter after the huge price increase (from $840 at the start of the year to over $1000 by mid March or a 19% increase in less than 3 months ) demand remained remarkably robust  (especially investment demand) and shows that there is a floor under the market supporting prices at these levels.

While jewellery demand declined expectedly, it is investment demand that is assuming increasing importance especially in light of the deteriorating global macroeconomic and financial fundamentals. 

Resource Investor reported that "in marked contrast to India, demand in China grew by 15% to 101.7 tonnes, with both jewellery and investment demand increasing during the first quarter as continued economic strength allowed consumers to increase their purchases regardless of the rising price. Jewellery demand rose 9% to 86.6 tonnes and investment demand surged 63% to 15.1 tonnes ."

China is assuming increasing importance in the global economy and in the gold markets and will continue to do so and Chinese demand is likely to increase towards the huge levels seen in India which will result in a markedly higher gold price in the coming years. 



Gold ownership for Chinese citizens was legalised in 2004. A system for selling bullion to the largest population in the world  (some 1.3 billion) is now in operation. And  the effect on  global gold demand  is likely to be staggering. The Chinese Central Bank is also diversifying out of US dollars and into gold.   In March 2006, the National Development & Reform Commission of China said that  “China intends to more than double its gold reserves to 1,270 tons this year.”

An other  important development in China is that the Shanghai Gold Exchange (SGE)  has allowed  tangible gold trading by individual investors. The new gold trading allows investors to receive tangible investment grade (0.9999) gold on delivery. It  is an additional investment alternative and will likely lead to diversification amidst increasing uncertainties in the stock market. T he Chinese stock market has been very volatile of late and is down 43% in the last 6 months (from over 6,000 to 3,500).

China's appetite for gold continues to increase and according to the China Gold Association, China became the third biggest consumer of gold in the world earlier this year.

In an interesting and important article ( http://www.chinadaily.com.cn /bizchina/2007-07/04/content _909536.htm ) in the China Daily:
" . . . Chinese analysts noted that trading of tangible physical gold itself would attract many more individual investors. "Compared with the previously traded products for individual investors on the SGE, paper gold for example, the trading enables investors to deliver tangible physical gold and would hence attract many investors," said Tang Mingrong, an analyst with Ling Rui Gold Investment Co. "The increasing need of hedging risks by individual investors spurs the launch of physical gold trading," Tang said. Buying gold is widely seen as an effective way to reduce risks in an investment portfolio, as gold prices remain relatively more stable in times of economic and market uncertainties. Concerns about worldwide inflation also add to the charm of investing in gold. "The further opening of the gold market to individual investors would provide them more investing channels and alleviate the excess liquidity in the nation's financial market," said Wang Lixin, general manager of World Gold Council, Greater China. "

With the recent huge volatility in the Chinese stock market and increasing signs of rampant speculation in stocks, it seems likely that there will be  further diversification into gold by Chinese investors resulting in  sharply higher prices in the medium and  long term.

Silver
Silver is trading at $18.0 5 /18. 10 per ounce at 1100 GMT.

PGMs
Platinum is trading at $21 75 /2 185 per ounce (1100 GMT).
Palladium is trading at $453/458 per ounce (1100 GMT). 

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland
Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie
Gold Investments
Tower 42, Level 7
25 Old Broad Street
London
EC2N 1HN
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708
Email info@www.goldassets.co.uk
Web www.goldassets.co.uk

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Mark O'Byrne Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules