Gold A Slam-Dunk Sell in China As ‘Aunties’ Buy Bullion

Wearing a thick coat to protect against the autumn cold while standing in front of Beijing’s busiest jewelry store, Yang Cuiyan, a 41-year-old housewife from Anhui Province, holds a gold necklace for which she paid 10,000 yuan ($ 1,640) or a five-month salary. It is another reason why China is ready to overthrow India as the world’s largest consumer of gold, even though investors around the world are leaving the yellow metal.

“I don’t know anything about the stock market and I don’t have enough money to buy property, so I concluded that gold is the safest choice,” she said. “I can wear it when I get home to show everyone I’m fine.”

Buy gold bars:

Yang traveled 650 miles from her rural home (1,000 kilometers) to the Chinese capital to shop and visit relatives. Ms. Yang is one of the growing legions of middle-aged Chinese women, respectfully called ‘aunts’, who bought gold jewelry and gold coins this year in 2013, adding support to the gold market, while many professional investors are avoiding it. metal as a means of preserving value in early 2013.

The world’s second largest economy is gold bars! Leverage consumption in 2013 rose 29 percent to a record 1,000 metric tons, according to estimates by traders, analysts and gold producers in China polled by Bloomberg News.

That demand could fall 2.4 percent in 2014 from this peak, indicating purchases larger than any other country and more than the U.S., Europe and the Middle East “combined”.

Buy gold bars: In the 12 months to September 2013, China’s demand for gold jewelry, bars and coins rose 30 percent to 996.3 tons, while use in India rose 24 percent to 977.6 tons, nearly “1,000 tons.” each in just 12 months! Wow, that’s a huge record for a one-year purchase according to the London-based World Gold Council. The first country to buy gold for the calendar year 2012 is again India.

“In China, you look around and see very few places where you can invest your money,” said Duan Shihua, a partner at Shanghai Leading Investment Management Co. “With the stock market falling and the government forcing people to give up real estate, gold will remain a favorite choice.”

Another “gold driver” are the Golden Brides of India. In India, thousands of brides get married “every day” and it is traditional social etiquette to give away “golden jewelry” because it is so highly valued there. India and China are similar in this respect as another “driver” is in demand [more Gold].

After 14 percent [drop] in gold prices in two days in april 2013, images in chinese media ‘aunts’ clearing shelves in gold stores illustrate the demand for gold bars that defies the views of the biggest banks in the west and highlights limited investment opportunities in china. The world’s most successful investor, Warren Buffett, said he was not attracted to the metal, and Goldman Sachs Group Inc.’s head of commodity research, Jeffrey Currie, who correctly predicted this year’s collapse, called it a “dunk” in 2014.

Gold price forecasts:
Bullion is 34 percent below the record set in 2011 and is on track for its first annual [loss] since 2000 after falling 24 percent to $ 1,276.64 an ounce in London this year. Standard & Poor’s GSCI meter of 24 goods [fell] 5 percent since late December 2013 and the Bloomberg U.S. Government Bond Index [lost] 2.1 percent. While the MSCI All-Country World Stock Index rose 18 percent over the same period, the Shanghai Composite Index fell 3.4 percent.

According to a median estimate of the 10 most accurate precious metal analysts tracked by Bloomberg in a survey released last month, Bullion will average $ 1,175 in the third quarter of next year. Prices were last at that level in 2010. Goldman expects prices of $ 1,050 by the end of 2014.

While disposable income per capita in urban areas rose 9.5 percent, China’s cash per capita income in rural areas in the first nine months jumped 12.5 percent from a year earlier, according to the National Bureau of Statistics. China’s economy grew 7.6 percent this year, 2013, and is projected to grow 7.4 percent in 2014, according to a median estimate compiled by Bloomberg.

China ranks fourth in the world in terms of the number of people with $ 1 million or more in investment assets, after their number of high-net worth individuals in the country rose 14 percent to 643,000 in 2013, according to Cap Gemini SA and Royal Bank of Canada. The United States ranks first in the number of millionaires, followed by Japan and Germany.