Author Topic: NEWS:Gold investment demand in China up.  (Read 2412 times)

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Offline Panda Halves

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NEWS:Gold investment demand in China up.
« on: June 12, 2012, 02:23:51 PM »
Or (still) up....
Source Bloomberg:
http://mobile.bloomberg.com/news/2012-06-10/gold-investment-demand-in-china-to-advance-10-icbc-forecasts.html
"China will topple India this year as the largest bullion market as rising incomes bolster demand, the World Gold Council forecasts."
"As China allowed investors to buy and hold gold only in recent years, “there’s explosive, pent-up demand because the Chinese have an attachment to gold,”

Offline davidt3251

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Re: NEWS:Gold investment demand in China up.
« Reply #1 on: June 12, 2012, 07:13:09 PM »
It has been pointed out on other financial sites that hiigh levels of Chinese gold investment can be a double-edged sword.

When large quantities of Chinese wealth get locked up in assets like gold, silver, art, that produce no return, it has repurcussions to the global economy. At a time when the Chinese banking system needs deposits so that it can leverage those deposits into financings (witness SOEs reneging on commodity contracts, and a $60bn Chinese stimulus not spurring additional bank lending), the continued strong flows into gold could produce greater and greater drags on the world economy in its current sad shape.

It would be far better to have an expanding global economy with strong flows into gold, than those strong flows putting the global economy at further risk-as is occurring now.

Offline badon

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Re: NEWS:Gold investment demand in China up.
« Reply #2 on: June 12, 2012, 10:01:52 PM »
Since the Chinese banks are the ones selling the gold, I think China is aware of the double-edged sword.

Offline davidt3251

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Re: NEWS:Gold investment demand in China up.
« Reply #3 on: June 12, 2012, 10:22:13 PM »
Maybe the bank managers will get a call from the auto retailers.

Slowdown signs - Glut worsens in Chinese car market

According to China’s biggest auto dealer association, carmakers need to scale back their sales targets or sweeten incentives because the worsening glut of vehicles across the nation dealerships is unsustainable.

Mr Luo Lei deputy secretary general of the state backed China Automobile Dealers Association said average inventory carried at Chinese dealerships bloated to a level exceeding two months of sales by the end of May, compared with more than 45 days at the end of April. That's forcing dealers to deepen discounts and sell cars at a loss to meet mandatory sales targets set by automakers.

Mr Luo whose association is authorized by the central government and represents 2,100 dealership groups said “Dealers can’t shoulder the burden anymore. Their backs are broken.

etc

http://www.steelguru.com/chinese_news/Slowdown_signs_Glut_worsens_in_Chinese_car_market/268196.html

Offline Jay

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Re: NEWS:Gold investment demand in China up.
« Reply #4 on: June 16, 2012, 03:49:38 AM »
Acquisition of gold and other hard assets is being encouraged by the Chinese government on many levels, including the consumer level. Perhaps they are well aware of the debasement game being played by world central banks and see hard assets in Chinese possession as a defensive strategy.

The recent purchase of the LME by the Hong Kong Exchange is just the latest step in what appears to be an ongoing process.
http://online.wsj.com/article/SB10001424052702303734204577467912492917718.html?mod=googlenews_wsj

Offline Panda Halves

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Re: NEWS:Gold investment demand in China up.
« Reply #5 on: June 16, 2012, 05:06:19 AM »
The purchase of the London Metal Exchange by the Hong Kong Exchange for 2.14 billion dollars is huge news for China's continued hunger for precious metals and for their renewed quest to control the precious metals marketplace.
http://dealbook.nytimes.com/2012/06/15/hong-kong-exchange-to-buy-london-metal-exchange-for-2-1-billion/
*For those who think exchanging metal is a timid and unexciting affair please refer to the NY Times photo in the story above.