Chinese to Overtake Indians to Be No 1 Gold Buyers for First Time

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China Is Ready to Pass India in the Gold Race. Bloomberg BusinessWeek, Dec 2, 2013.
http://www.businessweek.com/arti ... -purchases#r=hpt-fs

Quote: Gold purchase

“Gold purchases in the world’s second-largest economy will surge 29 percent in 2013, to a record 1,000 metric tons, according to the median of 13 estimates from analysts, traders, and gold producers in China surveyed by Bloomberg News. China’s purchases of gold climbed 30 percent, to 996.3 tons, in the 12 months through September, while sales in India rose 24 percent, to 977.6 tons, according to the London-based World Gold Council. India was No. 1 in 2012. Each country buys more gold than the US, Europe, and the Middle East combined. Gold’s burnished appeal in China stems in part from a lack of alternative investments. While the MSCI All-Country World Index of equities rose 18 percent this year through Nov 22, the Shanghai Composite Index slumped 3.2 percent.

“In April, when the price of gold fell 14 percent in two days, Chinese media showed images of aunties clearing shelves in gold shops. ‘I don’t know anything about the stock market, and I don’t have enough money to buy property, so I figured gold is the safest choice,’ says Yang [Cuiyan, a 41-year-old housekeeper from Anhui province standing outside Beijing’s busiest jewelry store], who made the 650-mile journey to Beijing from her rural home to visit relatives and shop.

Note:
(a) summary: Falling prices send aunties on jewelry-buying sprees
(b) The report (which ends with the byline “Bloomberg News” rather than a specific reporter) gives a reader the impression Chinese are buying gold jewelry, like Indians. But the original report is more nuanced (they are buying gold in all forms):
Feiwen Rong, Gold No Slam-Dunk Sell in China as Aunties Buy Bullion. Bloomberg News, Nov 19, 2013.
http://www.bloomberg.com/news/20 ... es-buy-bullion.html

Quote:

“China’s demand for jewelry, bars and coins rose 30 percent to 996.3 tons in the 12 months to September

“Warren Buffett, the world’s most successful investor, said the metal has no appeal, and Jeffrey Currie, the Goldman Sachs Group Inc. commodities research chief who correctly forecast the rout this year, on Oct. 8 called it a ‘slam dunk’ sell for 2014.

“Bullion is 34 percent below the record set in 2011 * * * Societe Generale SA, which correctly predicted gold’s slump this year, sees prices averaging $1,125 next year, the lowest since 2009, because an eventual slowing of U.S. stimulus as the economy strengthens will cut demand.

“While China overtook South Africa to be the world’s largest gold producer in 2007, domestic output failed to keep up with the nation’s consumption * * * [China’s] Production of 403 tons in 2012 compares with domestic demand of 776 tons, according to the China Gold Association.

* Bloomberg’s title makes fun of the last quotation. There is no need to read the rest of Bloomberg report.