Generally speaking, rising prices tend to temper demand, but when it comes to gold in China, the recent price rally has created the opposite effect. As theWall Street Journal put it, ‘Chinese investors see a golden opportunity.’
Demand for gold has surged in China over the last several weeks, during a period generally considered out of season. And it’s not typical Chinese jewelry purchases driving the demand. Chinese investors are buying gold coins and bars.
Typically, gold purchases in China are strongly associated with jewelry buying around the Lunar New Year holiday, which this fell in early February. But the uncertainty confronting global economies has driven up demand from a different sort of buyer – the hard-nosed investor.’
This post was published at Schiffgold on MARCH 28, 2016.
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