Wednesday, August 12, 2009

China Has Become the 600 pound Gorilla in the Gold Market

China recently surpassed South Africa as the world's largest gold producer - it is the only country in the world with increasing gold output - overall global gold production has been declining for about three years now. China has now become the largest "consumer" of gold, taking over the number 1 spot from India. I borrowed this post from, an invaluable nightly report on the gold market if you want to actively invest in the sector:

One of the beneficiaries of the explosive growth of the Chinese money supply is the Shanghai Gold market, which is trading near 6,600 Yuan per ounce, and is also tracking powerful rallies in industrial commodities. China is poised overtake India as the world's top gold consumer this year, and there is speculation that Beijing will quietly buy the gold which the IMF wants to sell in the years ahead.

China's Gold Dominance

China, now the world's biggest Gold Mining nation, is seeking to boost gold output by 3% to 290 tonnes this year, far less than the 400 tonnes it consumed last year. Thus China could become an even bigger importer of the yellow metal in the months ahead, helping to cushion inevitable corrections in the gold market. And given the trade-off between expanding growth and fighting asset-price inflation, Shanghai traders are betting that Beijing will opt to blow even bigger bubbles in asset markets.

China Will Drive the Price of Gold Much, Much Higher

No comments:

Post a Comment