You Can’t Make This Stuff Up!
Gold gained about one percent in light trading… as London was closed for the Easter Monday holiday. Gold’s high price of the […]
Gold gained about one percent in light trading… as London was closed for the Easter Monday holiday. Gold’s high price of the […]
Given the American national debt and deficit problems … the U.S. greenback has the potential for considerable downside … and by axiom, […]
Given the American national debt and deficit problems … the U.S. greenback has the potential for considerable downside … and by axiom, […]
Interview: Rob McEwen and the Next Homestake Mining Company By Ron Hera April 5, 2010 ©2010 Hera Research, LLC Hera Research is […]
The new report “Gold in the Year of the Tiger” from the World Gold Council (WGC) predicts that gold consumption in China could double in the coming decade as a result of rising demand for jewelry, hard-asset investments and industrial uses. This forecast seems reasonable, and it lines up with what I’ve long been saying about the profound evolution in China’s economy – domestic consumption is replacing exports as the growth engine as more poor Chinese move up into the middle class and from there into the ranks of the wealthy. Tens of millions of people in China are joining the middle class every year – by some estimates, they already number more than the entire U.S. population and could double in the next decade. They are buying more spacious and better-outfitted homes. They have made China the world’s largest automobile market, and a wide range of brand-name Western luxury items are available even in provincial cities. China has a centuries-long cultural affinity for gold, so it makes sense that more middle class and wealthy would mean more gold sales. The line on the WGC chart above shows how investment demand for gold has rocketed up from next to nothing in 2001 to 80 tonnes (2.6 million troy ounces) last year, with the sharpest upswing coming after trading rules were liberalized in mid-2007. Over the same period, China’s GDP roughly tripled. The Chinese are famous for their high savings rate, and the chart shows how important gold has become as a store of their growing wealth. The next chart compares China’s annual gold jewelry consumption to more than a dozen other countries. Last year, China consumed 347 tonnes in jewelry, which was about 30 tonnes more than the country’s total gold production (tops in the world). But on a per-capita basis, China is near the bottom of this list. The World Gold Council points out that, if China matched Saudi Arabia on a per-capita basis, it would consume an additional 4,000 tonnes of gold jewelry each year. That’s more than last year’s demand for the entire world (3,386 tonnes), so even the most enthusiastic gold devotees would probably agree that it’s not a realistic number. But given projections that the Chinese middle class will double in the next decade as China’s economic growth generates a wider distribution of wealth, it’s not farfetched to think that its gold consumption could also double. It is farfetched, however, to think that China’s domestic gold output could keep pace with demand growth – more and more of the world’s gold production (on a declining trend for years) would have to be diverted to the Chinese market, and the result could be a significant impact on gold prices in the years to come.
The revelation at last week’s CFTC meeting that JPMorgan was the prime instigator behind the repeated ‘takedowns’ of the price of gold […]
www.GoldForecaster.com This is a snippet from the Gold Forecaster. The newsletter that covers all pertinent factors affecting the gold price [with a […]
Lately we’ve been writing about the importance of the bond market. Want a hint if we will have hyperinflation? Follow the bond […]
Do the past successes of resource company principals portend future successes as they migrate to other companies or projects? Investment Banker and […]
Over two thousand years ago, China began to build its Great Wall in order to keep nomadic tribes and marauding armies from […]