China Gold Demand Off To Hot Start


It looks to be another boom year for gold. Investors are anticipating a continued demand for the precious metal for the fifth year in a row, driven by geopolitical uncertainties and less-than-strong predictions for the U.S. economy and the U.S. dollar in 2019.

In times of economic turmoil, gold has always served as a hedge against the decreased value of stocks or currency. Faced with unusual market volatility, people around the globe are turning to the yellow metal as a haven and safe investment diversifier. The price of gold rose by 14 percent in 2017 and is likely to go higher.

While the U.S. dollar is expected to lose some value in 2018, the Euro and other currencies are showing a modest gain.

India has historically turned to gold not only for investment purposes but for jewelry. Its traditional wedding season is approaching, and gifts of gold jewelry are the norm, even among India’s more impoverished population.

During the first quarter of 2018, India saw a 12 percent decrease in demand for gold jewelry from the same period in 2017. Total gold purchased dropped from 99.2 tons to 87.7 tons. However, India’s demand for gold spiraled to a record high in the fourth quarter of 2017, up to 189.6 tons, so the drop was not unexpected. The rest of 2018 looks positive for Indian gold demand. A good monsoon season is predicted, which means healthy revenues for the farmers that make up one-third of India’s gold buyers for the upcoming wedding season. During drought years, such as 2014 and 2015, India’s gold consumption historically experiences a decline in gold demand, so this year’s weather forecast is new news.

China, the world’s major importer of gold, has been actively accumulating gold and is expected to continue doing so in the near future.

During the first quarter of 2018, demand for gold jewelry totaled 187.7 tons, up 7 percent.

Chinese jewelry sellers are working to attract a prosperous, more sophisticated, younger generation of customers by expanding and diversifying its selection. Following a slow retail year for jewelry in 2017, China is looking forward to strong sales in 2018. Withdrawals at the Shanghai Gold Exchange have been above average at 170 tons monthly. April’s demand for gold was up 28 percent from 2017.

With political tensions between the U.S. and China escalating, Chinese investors are turning to gold bullion as an economic hedge. First quarter 2018 saw the demand for gold at 78 tons.

In addition to jewelry, the Chinese government has been actively increasing its gold supplies for the past decade, along with its ally, Russia. This move is believed to precede China’s plan for a gold-backed yuan, which could significantly devalue the U.S. dollar and could replace the dollar as the global reserve currency of choice. If this happens, the price of gold is expected to rise to new, unprecedented heights, along with a political power shift from the West to the East.

Gold has always been in demand for its intrinsic value. If current trends continue and the demand for gold accelerates at its current rate, the price of gold will skyrocket.


Son of Captain Nemo Wed, 05/16/2018 - 13:32 Permalink

No small wonder why Gold is below $1,300?...  Looks like "deal-a-rama" is taking place for Russia and China to get more bargains on the metal(s) while the price fixing in the Euro/$dollar pen favors the "back room deals" of desperation for Jerome/Fed and Stevie/U.S. "T"!...

Like I've said many times before...

If you are maintaining the "status quo" ie Russia, China on the backs of the BOE and Federal Reserve continuing to "fix the price" without attempting to break out of the vacuum that favours you at everyone elses expense by NOT  providing incentives for genuine price discovery to level the playing field in making it "fair"?... Then...

The Russian Central Bank and PBOC MUST BE "IN ON IT"?!!!

Son of Captain Nemo Son of Captain Nemo Wed, 05/16/2018 - 13:43 Permalink

Perhaps those $BTC mining servers will be returning shortly to China from Canada (…) courtesy of the PBOC "re-opening it's doors" if the Au and Ag prices go down another $200.00 Au/$6.00 Ag?!!!…


In reply to by Son of Captain Nemo

Consuelo Wed, 05/16/2018 - 13:47 Permalink

No-shit-Sherlock obviousness and the usual sarcastic comments regarding the stagnant (Western) PM markets aside, these are 'old' nations - China, Russia, Iran, etc., who have 'seen' and lived through recent history, as well as a keen knowledge of the past.   Their collective appreciation and rather unsettling pace of PM accumulation over the past (10) years should not be taken lightly.   They know what they are doing.   Of course, Western nations likewise know what they themselves are doing.   The only question that remains is when and to what degree, will this PM accumulation be brought to the fore as a 'use', or one could argue - a economic weapon?

666D Chess Wed, 05/16/2018 - 13:55 Permalink

As long as imbeciles in the west are willing to buy imaginary gold that the banks sell to them gold prices will never go up simply because there is an infinite supply of imaginary gold. Don't blame the banks, they are doing what bankers are supposed to do, committing crimes, blame the idiots that play along with them. Gold is going to stay exactly where it is or going lower. If you are expecting the Chinese to allow gold prices to shoot up, pull up a chair. Have you ever seen them picking a meal from a menu at a fast food restaurant? China is not in a rush for anything. I learned the lesson the heard way, I missed the bitcoin and ethereum trains for listening to Peter Schiff. At least I didn't follow Bill Holter's advice to sell my gold to buy food and build a nuclear shelter for the "reset". 

Scuba Steve 666D Chess Wed, 05/16/2018 - 14:23 Permalink

With 1 caveat and I'm not sure on this ...

What if their Exchange has boatloads of redemptions wanted for physical? Even US Hedgies(Among others) getting physical this way and storing it Off-shore.

Will this not keep raising the ante on the arbitrage between the Exchanges with the Shanghai traders (And anybody else around the globe sniffing this trade) ??

In reply to by 666D Chess

SnottyBubbles Wed, 05/16/2018 - 14:30 Permalink

With China heavily investing in bankrupt Venezuela, Brazil, South Africa and now Iran ... it only makes sense that they'd pour the coal to buying inanimate gold from investors who've lost capital in gold for 10 years while losing their minds for avoiding the 210% increase in stocks.


But then again look at the amazing disappearing Venezuelan gold reserves. The west doesn't oil in gold. China is not 'buying' all that Venezuelan gold … they're extorting it.


If the end of the global economy as we know is near … I still can't figure how big a scrap off my heavy dang gold buys a can of beans at the grocer. Would I still need to waste a 20% sales premium to buy script? Gold cost like 20% to buy, then 20% to sell. Gold needs to increase 40% a year to yield nothing.

BitchesBetterR… Wed, 05/16/2018 - 14:47 Permalink

for the 100.000th time: 

As long as the Motherfucking Central Banks Jews, the Wall Street Casino, The FED, the ECB, COMEX/LBMA & The Dollar are kept as the only game TPTB want to play, PMs are going to remain low.

for PMs to find true value, the USA & Western economies have to collapse completely while dragging all the paper bill institutions along with it.   

Nuclear Winter Wed, 05/16/2018 - 17:31 Permalink

Can't trust Xi or the CCP. Chinese gold needs to be authenticated by weight and karat and then put on the blockchain for transparency.

Can't trust the Red Commies...

Herdee Wed, 05/16/2018 - 22:16 Permalink

Lots of printing still to come. Deficits in the trillions and demographics hitting government hard. Add in the dwindling tax receipts. You have a recipe for nobody buying the out of control debts. Of course the individual States could get some tome by legalizing cannabis in a last ditch effort to save themselves.