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The One Thing Most Desired By Chinese Consumers Is...
Hint: it's not designer clothes, shoes, bags or watches.
And some additional explanation from the World Gold Council:
The Chinese traditionally regard gold as a form of money. Indeed, the character for gold in Mandarin (jin) is also a synonym for money. This is an important fact when it comes to the motivations behind the purchase of jewellery. Asian buyers of plain, 22 or 24 carat jewellery have no doubt in their mind that they are buying gold as well as an object of beauty that can be worn. The perception of value is very important in markets such as India and China where plain, very high carat or ‘pure gold’ articles bought on low-mark-ups comprise the majority of gold jewellery consumption. As such, the level and direction of local gold prices usually have an important bearing on jewellery consumption. This was very clear in 2013 when in April of that year the sudden slump in prices triggered an extraordinary wave of buying in China. Consumers perceived this as a unique opportunity to exchange renminbi for gold at a very favourable rate. It was also of course a chance to bring forward planned purchases for gifts or weddings, especially as the consensus was that prices were bound, eventually, to move a good deal higher.
World Gold Council consumer research indicates that consumers remain very positively disposed towards ‘pure gold’ jewellery. It might be thought that the disappointing price trend in the second half of 2013 had undermined this optimism as well as the public’s desire to purchase ‘pure gold’ jewellery. This does not seem to be the case. An extensive consumer survey conducted towards the end of 2013 on behalf of the World Gold Council illustrates how China’s population continues to view ‘pure gold’ jewellery as a form of money, with little indication that this traditional attitude will change any time soon. Asked whether they agreed with the statement that 24 carat gold jewellery "...is as much an investment as it is a fashion item” no less than 80% of the sample agreed, while only 4% disagreed (16% held no view either way). Agreement levels were strong across all respondents. Moreover, support for future demand is strong: in a separate survey of over 10,000 Chinese consumers, 76% of those aged between 18 and 27 also affirmed ‘pure gold’ jewellery’s investment status. And the majority of respondents planned to maintain or increase their spending on 24 carat gold jewellery over the next 12 months (44% and 35% respectively.
h/t @RudyHavenstein
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Huh, but even with high unreported inflation, 15 years ago you wouldn't get far with a five figure salary...
I thought they most desired a foreign passport - but maybe that choice wasn't offered in the survey.
All men?
I was just in Hong Kong, Macau, Singapore and saw the incredible amount of gold jewery stores, gold chairnam Mao next to gold laughing budda.
In Singapore around Chinatown the price of jewerly is $65/gram + labor cost the 7% tax (you can get back 6% of the 7% when leaving the country and submitting paperwork and wait for reimbursement). In Little India the small jewerly shop were 62.5/gram + labor + 7% again, unless you bought the 500 gram bar of gold, then it was 62.5 * 500 grams.
At 62.5 Singapore dollars per gram is around 1619 USD/troy ounce before any labor and 7%. So the premum on the gold is aroudn 25% and higher.
Macau had so many small 24 hour a day jewerly shops next to the big casino, I was told so many people want cash and sell their gold for gambling. On a strange note, casinos in Macau and Singapore did not have the waitresses bringing drinks to the table, in fact did not see any waitress. There was a sign with a guard in the Venetian saying NO PHOTOs, obviously the politicians must play there.
Did see a Hindu wedding and the bride wore so much gold, you could barely make her out.
Mao would be turning over in his grave if he saw a golden Mao.
Gold is the instrument of bergeouse oppression.
You will find that out to if we go to a classic gold standard rather than a freegold standard
how about Budda
Buddha don't die.
Thanks for the Singapore briefing.
I was hoping the waitress would bring a Singapore Sling...
Waitress...!! Where the hell is she...??
Just goes to show if you want real gold you have to pay a price much higher than the paper price of gold here that is often quoted. I would love to see anyone here actually be able to buy physical in the states at the price of paper gold. Heck no, nobody will give it to you at that price.
On Wednesday, the WSJ had a prominent article at the front of one of its sections saying how consumer demand for gold had collapsed in China, following the gold sell off on Tuesday. It's the rare occasion where you ever see reports on the subject of gold.
Obviously a Mockingbird planted story.
Stack on.
"On Wednesday, the WSJ had a prominent article at the front of one of its sections saying how consumer demand for gold had collapsed in China"
This is news? No...
It's a sign of desperation and we are seeing lots of those recently.
If China's intention was to turn up the heat on Western fiats they could have done no better than passing the law making legal private ownership of gold in China.
Very clever
And it seems the only Au they let out are my favorite Au and Ag Pandas!
The most recent one still had the mint name stamped on the plastic wrapper, so I kept it on. I usually put bullion coins into the round airtights. If I get a numismatic item, they usually stay in the stapled holders. My ANA dealer said they hold better value still in the mint plastic pouches.
It's easier to check the weight of a gold coin outside of the slab...
The only coins I keep inside their sleeves or slab are the Pt Eagle proofs. Yes, the slabbed ones are worth something like $50 - $100 more if left alone.
Plastic case for the Panda is sooo thin... I have accidentally cracked a couple of them.
Not really a fair poll without a Lamborghini option.
Yeah I know, the Chinese are so effing smart.
I was at my LCS last week and they said that 2 local residents of ME extraction came in and bought all the gold they had paying about $60,000 cash. It has taken them a while to recover from the draw down.
What city if I may ask?
Here in mine, few ME types.
Very few here too. SW FL
nothing that an infinite supply of Crimex paper can't cure....
At least you can wipe your ass with fiat bills. In the absence of access to clean water, last thing Chinese will see is a world of diarrhea.
Wait, you mean to tell me that it's not U.S. Treasuries?
You'd think they want air to breath.
Just saying.
Wilson
Isn't that chart from 2011?
excellent I just saw that too- the stupid chart is from 2011 yet all these comments...herro?
Japan ?
have you heard about an indian gold smuggler caught with twelve 400gram gold bars in his stomach ?
here is the story http://www.bbc.com/news/world-asia-india-27076019
More than gold they love their booze and gambling and tobacco, all of which have a much higher markup than gold.
Ask Adelson.
You can have my gold when you pry it from... well, you now the rest.
Im being dead serious here... Am I the only one who notices the chart is from 2011?
Not only does it make it irrelevant but it would also support the conclusion the Chinese consumer is in an investing idiot because even if PMs are the right place to be, and there is no doubt in my mind they are, then clearly following the sentiment of the Chinese consumer as it relates to PMs is foolish because all those that participated in this poll were slaughtered ever since... To me this entire article is BS... Lets go grab Schiff's predictions about gold from 2012 and act like theyre from yesterday while were at it...
Since all data from China is false, what difference does it make?
Because it further proves that despite the fact ZH is one of the greatest sites on the internet their PM related articles suck and have for quite awhile...
articles about precious always sucked when prices were lowest ....
On the other hand, the World Gold Council can go fuck themselves.
GLD inventory has dipped below 800 tons again.
Actually, this survey is wrong...What chinese consumers want most is:
Play Station
Play Station & game consoles are banned in china.
But no one follows the law.
Also, Japanese-made rice cookers....Those sold in Japan have the best quality.
Masses of chinese go to Japan to hoard them.....buying 3 to 10 appliances at a time.
Pray station?
You know ,the Chinese, back in 1992, played for Bill Clinton´s erection.
The article never stated why the Chinese desire gold. Is it to buy a Masser?
Money laundering by corrupt officials & too much counterfeit yuan bills.
that's impressive but why waste the mark-up on jewellery?
govts tend not to take it...
Not to be the ass I usually am, but that freaking chart is from 2011.
But the number one thing rich Chinese want is a foreign passport as they know that country is a ticking zionist timebomb. They'd swap the gold for a euro or American passport, farmland and weaponry.
Read a news item that 20% of all Chinese agricultural land is heavily polluted with nasty things, heavy metals, pesticides and indstrial strength chemicals. Obviously this is either undersestimated, or a figure for extreme contamination. Japan's Fukushima meltdowns are now admitted not to be under real control and radioactive water is admitted to be not under contol. The levels of particle contamination over agricultural lands around Fushushima are said to be mainly safe, but locals and scientists not connected to TEPCO beg to differ. In both cases, productive agricultural lands are being lost.
Weather for summer could, 50-70% chance be devestated by an El Nino event that is in progress of forming, which could reverse, but for now, the hot kelvin wave carrying the warm waters of the West pacific is the largest ever recorded, and the energy stored in the warm Pacific depths for years now could emerge as a super El Nino. This will hit many agricultural areas hard. Perhaps end California's drought, but end it in massive rain events that will do as much harm as good. Nothing is sure in weather, but all evidence today favors the super El Nino. If it indeed develops fully, it will drive food prices higher.
Taking everything into account, including termoil in Ukraine, a major bread basket. And severe heat and drought developing in neighboring Russian breadbasket areas, all I can say is Food Prices could be one of 2014's top stories, and we all know how instable many poor nations will become under pressure from food price infaltion. Add to that, central bank QE and mass liquidity inflows to Banker, speculator and Hedge funds, you have thousands of banker suits sitting at trading desks loaded with ZIRP billions ready to speculate on food commodities. Every thing I see points to a food price disaster by next winter. The El Nino could even devestate Australian agriculture in some areas.
I can't see 2014 being a year of increased economic recovery and political stability. On the contrary, we are on a glide slop to hell. And nut jobs like the puppet masters of Obama and the EU are clueless and senseless blundering war mongering idiots who are seperated from reality, and believe in their powers to rule the world in every sense. The battle has been joined by Russia, and China seems to understand that an end game of sorts is starting. Obama and his merry band of Neocons have made clear in many press releases that America plans to confront China with military force and economic warfare. This is a bad idea.
Go long gold, stock up on foods that keep well, keep some cash on hand outside the banking system. Washington has shown by it's all out attack on an old rancher in Nevada, that they see the American people as a dangerous enemy and we are all potential terrorists and threats to the Washington Corporate Neocon War machine and spy complex that claims to rule our nation with it's iron fist of baker power and a foreign policy crafted by the neocon zionists who make policy.
No wonder the NSA tracks the move of every American, they hate and fear any idea among the people that we might want our liberty back or we might see the interests of our fellow American friends, family and neighbors as more important than Corporate power and banker greed. Not to mention the zionists who see Israel as more important than any American city, county of state.
If all else fails, war on Russia will keep these thugs in power and all the rest of us spied upon and threatened. We have reached a sick and sad state of affairs, worse than I ever thought possible.
For me, summre 2014 is just the beginning of a major bust for us all.
Judging by the increase in insane reg's for farmers in Aust, NZ, USA; the push for TPP/TTIP; the transformation of water into a tradeable commodity (water meters appearing on farmer dams in Sth Aust; VC's investing in Tasmanian water allocations, etc.); and the like we can all see we are pushed towards a controlled food crisis -declining farms make us more vulnerable to tradeable "weather-events" and price hikes. Just as EMs have experienced. (Note: trades 2 weeks prior to the 2005 Tsunami raised eye brows over just how natural that weather event was).
Interestly, parts of Australia are cutting green and red tape to encourage big Chinese Agri business whilst pushing local farmers to suicide and bankruptcy (eg banks here can charge farmers extortionate interest rates they don't charge others).
Its seems China is preparing on more than one front with gold, foreign rural lands, resolve to fortify the String of Pearls, increased BRICS and geo-political power.......the axis tilting towards Russia and China is not a pleasant alternative to the Anglo-American axis.
Using debt, debasement, economic shocks, war and manufactured food scarcity is probably intended to push such an overwhelming series of rolling shocks onto us that we have little time or capacity to push back in-between the waves of new/tightened regulations, controls, price hikes and economic losses. Challenging times ahead.
Interesting post, thanks for the information. I spent some time in Melbourne and the Victoria countryside. My girl friends father managed a large wool wholesale business there. As a young man he started as a buyer, traveling the country arranging contracts for wool delivery. Long time ago now, but he had some insight into the business for sure!
That is why the West is going balls out for Ukraine, he who controls what goes into the stomach controls the world.
Proof of that being the coup govt in Kiev immediately reneged on the contract with China. Obviously their EU masters told them they wanted that farmland.
JB:
As usual, very well thought out and articulated statements. Your summary of 2014 is probably the most coherent and spot on assessments I have read this year. Thanks for putting your "thoughts to paper" so to speak, I appreciate you taking your time to type them out.
I agree that food scarcity, food inflation, and weather events are going to get much time in the press the balance of this year. I have not hear the "expert" forecasts yet, but I am expecting a VERY active Atlantic Hurricane season myself, yes, another effect from an El Niño Summer.
It is definitely time to step up preparations, we are on a downhill slide and picking up speed rapidly.
El Niño years usually have fewer US hurricanes, just sayin'.
You can look it up!
Wait, what about used womens' panties? Don't they sell them in vending machines in China like they do in Japan?
Well, gold jewelry is always worth a blowjob from the mrs. so, it's easy to see why it is in demand. If anything has true intrinsic value, it's a blowjob.
Supply and demand do not apply, until they do... New Normal don't need no stinking price discovery, until it do, Bitchez.
Gold for a BJ, I don't think so, BJ's are free.
Yeah, right. TNSTAAFBlowjob. One of the reasons women get married is so that they don't have to perform oral anymore, or at least, not as often. But give 'em jewelry and they'll be suckin on it all night.
American Intellectual Property (IP) is the correct answer.
More and more Chinese are waking up to much more important things as well:
http://www.telegraph.co.uk/news/worldnews/asia/china/10776023/China-on-c...
While the West is falling asleep to the much more important things as well.
The world would be a much better place if all religions were eradicated.
Becoming religious is hardly "waking up" ... more like "using narcotics"
The Telegraph is part of Britain's propaganda apparatus.
Chinese consumers are no different from American consumers.
It's all about bragging rights/
I have heard it said this way:
"Good stories don't come cheap."
Irregardless, (BS+ BS = BS2)
In actuality, (BS * BS = BS2)
The dreaded * multiplier.
In Reality {BS* bs2bs= BS<>SB- BS. That's pretty much how the U.S. of A. calculates financial obligations.
I thought for sure it was gonna be hookers.
That would be South Korea.
https://www.youtube.com/watch?v=avi45OrtJLk
Baby food. Exporters in our area send tons of the stuff over there. They do not trust their own food supply.
You a Kiwi?
And the one thing Americans desire, is to stop having these murderers practicing what they are going to do to Americans on the poor Yemeni peoples. This is blatant in the worlds face war crime, and there should be someone at the Hague that would actually DO something to stop this drone madness before it comes to a theater near you soon. Just think, all they have to do is SAY you are a "domestic terrorist" and they will then murder you and your family for just being a free God loving American going about the usual business of trying to survive the criminal corrupt bankster takeover of America.
http://www.blacklistednews.com/Obama%27s_latest_drone_attack_manages_to_...
Got depression?
Deflation Doom Podcast now up on the Doomstead Diner
RE
In china, people have no money & selling gold.....buying gold has no merit except money laundering in that country.
This article is deluded.
Happy Easter ZH family! Off to bed. Enjoy your private family gathering. Stay clear of Easter eggs claiming new quantitative easing or the subliminal government stimulus message found in a fortune cookie.
It becomes money when you need to unload it
If everyday gold is still a buy at any price what would be a good sell price say now and let us say 50 years? How can it be a store of value if at end of day it is variable in price?