LONDON (MINEWEB) –
Last Friday’s sharp upwards move in the gold price appears to have survived a few days of North American and European exposure intact, despite a significant negative in the shape of reduced Indian demand. This because the weak rupee means the gold price is at virtually record levels in local currency terms in the subcontinent, which has been the world’s largest buyer of gold for many years. Although latest figures are not yet definitive enough to see this as a permanent position, China may well have overtaken India as the key global consumer – and with a seemingly ever-rising trend in Chinese imports, and in Chinese production that does not leave the country, it could well be consolidating its world leadership position in gold demand.
But can the Chinese demand surge of the past few years be maintained in the face of an economic slowdown in that country of more than 1.3 billion people? Even a slowdown in China probably means higher growth than in the Western world and with inflation fears key amongst the country’s newly wealthy (by Chinese standards at least) and a predisposition to buy gold as a store of wealth anyway, there is at least the prospect of Chinese demand being maintained, if not actually increased.