$2,000 Gold Will Come from the East
Much has been made recently of the decision by George Soros to sell the vast majority of his fund's stake in the SPDR Gold Trust (NYSE: GLD) during the first quarter of 2011, emboldening the predictable chorus of bubble babble that plays incessantly in the background behind gold's symphony of sustained upward momentum. But while Soros and several other fund managers were busy locking in impressive gains from gold, an incredible surge in gold demand from Asia continues to pave a rising concrete floor beneath long-term gold prices.
$2,000 Gold Will Come From the East
Per capita demand for gold in China has been increasing at an accelerating rate in recent years, and the WGC considers that "near-term inflationary expectations and rising income levels are likely to support the investment case for gold as an asset class, especially given that Chinese consumers are high savers and are looking to gold to protect their wealth." As a result, the WGC concludes: "We believe that Chinese gold demand could double within the next decade. However, given the recent momentum in Chinese gold demand, we would not be surprised to see this result achieved in a shorter time frame."
Consumer demand for gold in India reached 291.8 tons during the first quarter of 2011, while China chipped in another 233.8 tons of demand (up 11% over the prior-year mark). Together, those two nations account for 57% of total worldwide consumer demand for gold, and more than 12 times the scale of demand originating in the United States!
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