Chinese Gold Demand Decreases, India’s Increases
Chinese shares have been on the rise while gold demand has been on the waydown, according to Wall Street Journal. In India, demand is strong, often times breaking records as the India government tries to move citizens into paper.
The Shanghai market has increased 41%, and mainland Chinese investors have in part moved Hong Kong shares up about 16%.
“Everybody wants to get on to the stock-market bandwagon,” said Victor Thianpiriya, a precious-metals analyst with Australia & New Zealand Banking Group Ltd. “It is having a big impact on jewelry demand.” According to WSJ, gold imports might decrease by as much as 20%. China has accounted for almost a third of global gold consumption. Sentiment regarding gold has already been downbeat as US interest rates are anticipated to rise, increasing the dollar’s value.
China’s import of gold decreased 7% from one year ago, down to 272.9 metric tons during the first quarter of 2015, led by a 10% slide in jewelry consumption, according to the World Gold Council, with Indian demand increasing by a total 15% to 191.7 tons; jewelry sales increased by 22%.
“I have been in the jewelry business for 40 years, but never has our business been so quiet as now.…No, not even when there was an outbreak of SARS,” or Severe Acute Respiratory Syndrome, in 2003, said Michael Shui, manager of a shop owned by Big City Jewellery Ltd.
“We had customers speculating on physical gold, but they don’t come anymore,” says Karone Huang, the manager of a gold-jewelry shop in Shanghai, adding that some of her employees left when sales dropped. Ms. Huang said that “75% of our employees are investing in stocks, [though] a lot of them are new to the market.”
She said a close friend made quick money by gambling on stocks, but lost money equally fast. “Their heads are hot. Gold has less risk,” she said.
At United Coin & Precious Metals we have seen steady demand from precious metals investors. La Jolla knows that precious metals are an excellent way to diversify your gold portfolio, whether it is with numismatic coins or bullion.