therealasset.co.uk / by JAN SKOYLES / JAN 23 2014
Whilst gold premiums on the Shanghai Gold Exchange remained constant yesterday, the lower spot gold price is in part due to worries over the future gold demand from China. Data released overnight and in recent days has suggested growth and activity isn’t quite what the government had planned. Any indication that the economy is slowing suggests that there will be a fall in demand for luxury and nonessential goods.
We would be inclined to agree if the good we were discussing was a games console or a designer handbag. But we’re in fact talking about gold which is not only seen as a safe haven when an economy is struggling but ownership is encouraged by the government.
Of course, there is always the chance that Chinese demand may decline, however we suspect that the amount by which it falls will not be enough to relieve the pressure currently on the gold system. Imports this year may not be as ground-breaking as we saw in 2013, as investors wait for the gold price to stabilize however the country is still likely to top the table of gold demand this year.