Author Topic: China refines its role in global gold market  (Read 3366 times)

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Offline exchange

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China refines its role in global gold market
« on: February 28, 2012, 08:26:10 AM »
I occasionally venture into jewelry stores here in the US for curiosity and I never see the lines I am accustomed to seeing and hearing when friends of mine tell me the lines at many retail Chinese jewelries in China.
Has anyone in this forum seen or experienced heavy crowds in the US at any retail store regarding people buying gold as a store of wealth aside from the few who buy small jewelry pieces such as rings for weddings and other special occasion?


"China, the world's largest producer of gold, will soon be the biggest buyer of it. Its spree is fueled partly by the government as it boosts its reserves but mostly by consumers seeking a hedge against inflation or to show off their wealth.

Reporting from Beijing— A bit player only a decade ago, China has emerged as one of the most important forces in the global gold market, helping fuel the rising value of the precious metal.

Already the world's largest producer — it overtook South Africa in 2007 — China is now bedecking itself in bling. It's on track to become the globe's largest consumer of gold as early as this year, knocking off India — whose elaborate wedding dowries kept it on top for years.

Some of China's gold is going to its central bank as the government quietly boosts reserves. But the biggest driver is Chinese consumers. They're snapping up jewelry, coins and bars as a hedge against inflation and to flaunt their rising wealth.

To witness the frenzy firsthand, head to Beijing's Caishikou Department Store, a four-story gold emporium that rang up sales of $1.5 billion last year. Visitors be warned: sharpen your elbows and be ready to push.

To buy a necklace, shopper Wang Li recently fought her way through a scrum of cash-waving customers hanging over a glass counter loaded with gold chains, Mao pins, pendants of Christ on the cross and more.

"I thought about buying Swarovski crystal, but I don't think it will ever be as valuable as gold," said Wang, a 24-year-old teacher who treats herself to a new piece of yellow-metal jewelry about once a month. "Besides, I like how feminine gold makes me feel."

On another floor, customer Zhang Li waited in line to purchase gold bars, an investment he describes as the only safe bet left for ordinary Chinese.

"If I had invested in stocks or property last year, I would have lost money," said Zhang, 36.

Chinese demand reached nearly 770 metric tons last year, up 20% from the year before, according to the World Gold Council in London. Desire for the yellow metal is so strong that China is buying record amounts from abroad because its mines can't keep pace. China imported more gold than India in the fourth quarter of 2011.

Gold in New York hit a three-month high Thursday before slipping $9.80 Friday to $1,775.10 an ounce. Analysts said strong demand from China is a factor in the recent run-up.

"There's no doubt that China will eventually be No. 1," said Jeff Clark, a senior precious metals analyst for Casey Research in Stowe, Vt. "Our jaws have been dropping at the volumes being imported for over a year now."

Gold for centuries has been a store of wealth and a symbol of good fortune in China. But China's heavyweight status in the gold market is more recent. In 2002 the central government lifted controls and set up the Shanghai Gold Exchange, allowing the metal to be priced by market forces.

In addition, Chinese consumers eventually were allowed to purchase bullion through commercial banks. Today China accounts for 26% of global gold demand, up from 6% a decade ago.

"Chinese demand has traded positions with the U.S. in the last decade," said Albert Cheng, Far East managing director of the World Gold Council. "It's very clear the gold market is moving east."

Meanwhile, consolidation and foreign investment in China's mining industry produced larger, technologically sophisticated players. The result? The nation's gold production has nearly doubled in the last decade to 360 metric tons last year.

No group has welcomed China's liberalization of gold more than the country's middle class.

Rising incomes have whetted consumers' appetite for jewelry and other luxury goods. But it's also about security. With the real estate and stock markets gyrating and banks paying minimal interest rates on savings accounts, many Chinese view gold as the best vehicle to protect their savings from inflation.

"Gold in China is always about safety," said Andy Xie, an independent economist in Shanghai and the former chief Asia Pacific economist for Morgan Stanley. "It's the preferred asset when the world is in chaos. China has failed to give people a sense of security."

Although international gold prices have retreated from their peak of $1,891 an ounce in August, analysts expect values to be partly buoyed by demand from central banks in emerging markets, including China".



http://www.latimes.com/business/la-fi-china-gold-20120227,0,4040073.story


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« Last Edit: February 28, 2012, 08:40:16 AM by exchange »

Offline bonke

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Re: China refines its role in global gold market
« Reply #1 on: February 28, 2012, 08:51:17 AM »
Caishikou Department Store is amazing with sales of gold, jade and precious gems.  There are many other stores selling these items, but I do not think there is anywhere else in Beijing where a person can feel the energy, the demand and the frenzy as young wealthy people purchase these collectibles.  Certainly, there is no "energy" in the major coin market in Beijing.

Mark Bonke

Offline BChung

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Re: China refines its role in global gold market
« Reply #2 on: February 28, 2012, 09:55:24 AM »
so r the stamps and paper money market. I have to admit that I am shocked how well the stamp market continue to perform......as I say too much hot money flowing around.

Offline SANDAC

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Re: China refines its role in global gold market
« Reply #3 on: February 28, 2012, 10:54:25 AM »
Yeah, stamp is just paper, people don't write letters anymore, it is just for retired old men with a lot of time on hand.  Well, don't tell the bidders of this auction:

http://www.ebay.com/itm/390392971537?ssPageName=STRK:MEBIDX:IT&_trksid=p3984.m1426.l2649

$2700 and 25 hours to go!  And no, I don't have that set.  Had a chance to buy it back in 1982 at 50x its face value. Ridiculous! bold face robbery of tourist in broad daylight!  Sigh...

Offline exchange

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Re: China refines its role in global gold market
« Reply #4 on: February 28, 2012, 12:07:21 PM »
Yeah, stamp is just paper, people don't write letters anymore, it is just for retired old men with a lot of time on hand.  Well, don't tell the bidders of this auction:

http://www.ebay.com/itm/390392971537?ssPageName=STRK:MEBIDX:IT&_trksid=p3984.m1426.l2649

$2700 and 25 hours to go!  And no, I don't have that set.  Had a chance to buy it back in 1982 at 50x its face value. Ridiculous! bold face robbery of tourist in broad daylight!  Sigh...

wow, that is amazing. For the same price you can get beautiful Chinese gold and silver coins.

It seems the Chinese stamp market became a lot hotter and is a lot hotter than Chinese coins from any point during the up move.

I have some Chinese covers bought many years ago, I should really check what I have. I rememeber selling 7 years ago a Chinese postcard used in 1903 showing a Chinese prince on a boat with German officials. I remember selling it for $350 and I was amazed at what it sold for. Hate to see what it may sell today.

exchange

Offline SANDAC

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Re: China refines its role in global gold market
« Reply #5 on: February 28, 2012, 01:21:32 PM »
Yep, Chinese stamps on cover, now you are talking about real money.  It doesn't even have to be that old.  If you have covers with Mao's stamps in the 1970's, it is big buck.

Offline exchange

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Re: China refines its role in global gold market
« Reply #6 on: February 28, 2012, 01:30:02 PM »
Yep, Chinese stamps on cover, now you are talking about real money.  It doesn't even have to be that old.  If you have covers with Mao's stamps in the 1970's, it is big buck.

I'm going to have to do some digging because I don't even know what I have. I know my oldest cover is from the 1890's.

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Offline haze

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Re: China refines its role in global gold market
« Reply #7 on: February 28, 2012, 09:30:30 PM »
Nice article, thanks for sharing!

I went to that store the article is talking about once. Ended up leaving pretty quick simply because there was way too many people and trying to make my way up to the display counters let alone flag down an employees attention (who most likely doesn't speak English) was way too challenging for me :)

It's interesting sitting back and watching gold boom in China. I seem to see more and more ads about buying gold all over the place. The other day I saw some on the subway and then again in a taxi.

Offline BChung

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Re: China refines its role in global gold market
« Reply #8 on: February 28, 2012, 11:03:58 PM »
On my last visit to Dong Guan there is a lot of recycling silver and gold places.

Offline BChung

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Offline pandamonium

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Re: China refines its role in global gold market
« Reply #10 on: February 29, 2012, 09:33:47 AM »
IF or WHEN the Chinese currency RMB becomes world wide, what will the value of our Chinese coins become?  It looks like gold/silver are in breakout again.  Another reason for high coin prices.  The majority of folks I meet in my community, in the Pacific NW, have no clue to Chinese coins.  Even the majority of coin dealers do not understand.  The best business is getting in on the ground floor before it becomes main stream news.  Chinese coins could become the best (highest demand) of precious metal bullion...........

Offline exchange

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Re: China refines its role in global gold market
« Reply #11 on: February 29, 2012, 10:27:15 AM »
Yeah, stamp is just paper, people don't write letters anymore, it is just for retired old men with a lot of time on hand.  Well, don't tell the bidders of this auction:

http://www.ebay.com/itm/390392971537?ssPageName=STRK:MEBIDX:IT&_trksid=p3984.m1426.l2649

$2700 and 25 hours to go!  And no, I don't have that set.  Had a chance to buy it back in 1982 at 50x its face value. Ridiculous! bold face robbery of tourist in broad daylight!  Sigh...

Almost $7000 now with over an hour to go. Just amazing.

exchange

Offline BChung

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Re: China refines its role in global gold market
« Reply #12 on: February 29, 2012, 11:37:08 AM »
http://www.youtube.com/watch?v=4eveuLgHclc&feature=player_embedded#!

Jim Rogers buying G Panda again... but...... he in the end..... well listen up.
« Last Edit: February 29, 2012, 11:44:08 AM by babycyt23 »

Offline SANDAC

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Re: China refines its role in global gold market
« Reply #13 on: February 29, 2012, 09:37:37 PM »

http://www.ebay.com/itm/390392971537?ssPageName=STRK:MEBIDX:IT&_trksid=p3984.m1426.l2649

$2700 and 25 hours to go! 

$7450 final.  Not too shabby for a piece of paper with face value of 40 cents, RMB.  That's 117000 times face value.  Suddenly I don't feel that bad about buying Chinese coins with 20x bullion value.

Offline exchange

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Re: China refines its role in global gold market
« Reply #14 on: February 29, 2012, 10:14:48 PM »
Suddenly I don't feel that bad about buying Chinese coins with 20x bullion value.

I was just thinking the same thing  :001_smile:
It seems the world of Chinese collectibles is healthy across many sectors.

exchange

Offline pandamonium

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Re: China refines its role in global gold market
« Reply #15 on: February 29, 2012, 11:49:26 PM »
$7450 for 5 stamps??...........   :ohmy:

Offline didochili

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Re: China refines its role in global gold market
« Reply #16 on: March 01, 2012, 09:38:44 AM »
$7450 for 5 stamps??...........   :ohmy:

Yes. A near perfect set of this is worth >$10k. This is the key set of the W series which includes sets from the cultural revolution period. This set has some minor flaws.

Offline exchange

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Re: China refines its role in global gold market
« Reply #17 on: March 01, 2012, 10:52:21 AM »
Yes. A near perfect set of this is worth >$10k. This is the key set of the W series which includes sets from the cultural revolution period. This set has some minor flaws.

I wonder how much this set of stamps woud cost if it was used on a cover and sent registered mail some where like Africa. Would anyone know how much it would bring if on cover regardless of country destination?

exchange