And as for gold! China as a nation has a strong relationship with gold, both as a store of wealth to protect against any future economic woes which may re-occur, but also as a hugely popular element in a society where gifting is an important part of everyday life coming to its peaks at major festivals – and in particular at the Chinese New Year. Demand as seen from Shanghai Gold Exchange withdrawals is running at huge new record levels this year (it will already have surpassed the 2013 full year record total when the latest SGE weekly withdrawal figures are announced tomorrow, with six weeks to go until the year end). Even the World Gold Council is seeing an increase in demand coming through, along with record central bank purchases!
The gold price though remains unmoved by all this apparent positive fundamental data, but this cannot, and will not, go on for ever without a counter reaction setting in sooner or later. Gold investors will obviously hope it is sooner, and as supply continues to move east surely this crunch point cannot be too far away, although the vested interests in keeping it under control may yet have a few more tricks up their sleeves.
This post was published at LAWRIEONGOLD