Chinese Demand For Gold Surges To Around 25% Global Production
It's hard to believe that ordinary Chinese citizens are responsible for an increase in gold imports to China– some 5 times larger than in the recent past. But, that is what the Financial Times of London reported this past week.
For one thing China is already the globe's largest producer. So, it has its own domestic supply of gold. Also, it suggests that possibly the Chinese are utilizing far greater amounts of their savings to purchase gold, rather than increase domestic consumption. Or that official figures of Chinese wealth are being under-stated.
Gold prices have been in a consolidation phase, trading between $1325 an ounce and $1375 an ounce for the past few months, as the dollar has been somewhat stronger in reaction to improving statistics on the US economy.
Another positive for gold is last week's recommendation from the IMF that $2 trillion in the form of a new international currency be created out of a weighted average of several currencies to begin the replacement of the dollar as the globe's chief reserve currency.
Gold experts point out that the recent weakness in gold has hit the price of the small mining company shares worse than the majors as speculation in gold has quieted down. The speculative interests in gold futures on the Comex has been substantially reduced. And net redemptions in the ETF GLD, has reduced its gold holdings by $2 billion or almost 4%.
So, you might say that the Americans are slightly retreating from gold as the Chinese holdings show record increases.
Thanks,
Commodity Daily
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