China Gold Buying Surges 41% To 1,176 Tonnes In 2013

China Gold Buying Surges 41% To 1,176 Tonnes In 2013

Today’s AM fix was USD 1,273.50, EUR 933.86 and GBP 776.95 per ounce.
Friday’s AM fix was USD 1,260.00, EUR 928.72 and GBP 771.16 per ounce.           

Gold climbed $9.70 or 0.77% Friday to $1,267.10/oz. Silver rose $0.09 or 0.45% to $20.03/oz. Gold and silver were both up for the week at 1.78% and 4.54% respectively.

Gold is higher again today in all currencies and building on last weeks higher weekly close of 1.9% in dollars. Gold advanced 3.2% in January, the first monthly gain since August, as the benchmark MSCI World Index of equities slumped 4.1%.

Gold in U.S. Dollars, 1 Year – (Bloomberg)

Gold is now 5.7% higher so far in 2014 and it’s importance as a diversification is being seen again.

Gold’s gains come before new Fed Chair Yellen’s testimony tomorrow. Market participants await her assessment of the poor payrolls data and for guidance regarding whether uber dovish monetary policy will continue.

Spot gold in Shanghai climbed to its highest level since December 26 as China returned from the Lunar New Year holidays. Gold of 99.99 percent purity on the SGE gained 0.8% to 250.25 yuan/gram.

China’s gold buying lept 41% to 1,176.4 tonnes in 2013. Gold bullion demand surged 57% and gold jewellery demand surged 43% according to the China Gold Association.

The demand surge has helped China become the world’s largest gold buyer.

Falling gold prices attracted store of wealth buyers for jewellery and bullion in China. This did not support prices in 2013, but could be the catalyst for higher prices in 2014. While gold ownership has surged in China in recent years, per capita ownership of gold in China remains well below levels in India.

Therefore, many analysts believe that the surge in demand is sustainable and will likely continue, underlining the shift in global demand from west to east.

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