16/04/2014
Savings of $ 7.5 trillion cash
Low prices brought Chinese savings to gold
Global Gold markets breathed a sigh after the World Gold Council report entitled ' the gold market in China' progress and prospects ' after the case of anticipation and anxiety deep in the past days after the negative speculation about the prospects of China's demand for gold this year. China exceeded India last year as the largest consumer of gold in the world. Thanks to the lower prices of the precious metal rising Chinese demand for jewelry and small gold bars, and thanks the Chinese converting their savings into gold to seize the opportunity to lower prices in the hope of selling it when needed or at high prices. The World Gold Council estimated the increase in Chinese demand for gold in 2013 almost 32 percent to 1,066 tons.
But the past weeks have seen analyses suggesting no change in total Chinese demand for gold this year than last year, but major economic newspapers speculated, including ' the street ' decline in Chinese demand, low economic growth rates, restrictions on credit markets. Whether Chinese demand was characterized by persistence or regression, it was would be bad news for the international gold markets. Since 2002, Chinese demand for gold is rising. These weights-that-could Jolt in international markets lead to the decline of 10 per cent of the price of gold since the beginning of the year so far .The Ukrainian crisis, and low interest rates in major industrial countries, in addition to economic setbacks suffered by emerging markets, led to an international demand for the precious metal has pushed prices up. The World Gold Council report that Chinese demand would rise by about 20 percent in the coming years, due to a shift from rural to urban life, and the growing Chinese middle class and from 2020 will range between 300-500 million people. And often prefer their keeper on savings in the form of jewelry or gold bullion. The report argues that 2014 will be ' strengthening ' the Chinese gold market trends, not in purchasing. The Chinese turnout to buy gold as was the case last year, might be less severe than last year, the domestic market is saturated with significantly.
The World Gold Council is counting on the Chinese private sector demand is expected to reach 1,350 tons by 2017. However, it does not negate the existence of enormous challenges with changing the economic model adopted by Beijing. The report notes that ' China faces significant challenges in the transition from an economic model based on investment and exports to a more balanced form, with a greater role for private consumption, however, the report finds a new form of continued growth in Chinese demand for gold, says ' although you should not underestimate the risks associated with this transition, however, the new model also leads to increased spending by local consumers, this could benefit the jewelry sector.
Betting on the savings capacity of Chinese families to encourage the buying of gold with their savings in cash at banks 7.5 trillion dollars, while possessing the gold worth 300 billion dollars, a small percentage of the total volume of financial savings, the World Gold Council hopes that the Chinese consumer to convert his savings from both domestic and foreign currencies to gold, encouraged by the gravity of the yellow metal and the prices reasonable.
Steve Hill of the London bullion market Association (LBMA) for the ' economic ': it seems that the future direction of the precious metal in China, but the liberalization of financial markets in China must be taken into account, may weaken the allure of gold, gold markets in China's recovery is due in part to the lack of channels for a variety of savings in the Chinese economy, the liberalization of financial markets, leading to further savings, gold will be one of them, not necessarily the best ,he adds: ' it's positive that the process of liberalization of financial markets in China would be gradual, and then the gold markets can cope with this situation. The report noted that Chinese investors save gold worth 77 billion dollars last year; a small percentage of their savings bank, means there is a broad horizon for increasing future demands for gold.
Dr. Phil Packer Professor of money and banking at the University of Newcastle for the ' economic comment ': ' recovery was not possible in gold demand in China without the support and blessing of the authorities. Ownership of gold by the citizens good and authorities as proof of the increasing wealth of the Chinese State, as Beijing is used as a means to absorb surplus cash, limit inflation is expected due to the increase in the money supply as a result of the huge trade surplus to China '. China is the largest consumer of gold bullion in the world, as well as the largest producer of gold, over the past decade, China's gold production increased from 220 tons to 440 tons, the World Gold Council expects Chinese production decline of depleted mines and shrinking reserves, leading to high production costs and low profitability, increasing the actions and laws regulating prospecting will reduce production in the short and medium.
The official data for 2013 showed that China imported and produced more gold than acquired, many specialists in the gold trade gap the Central Bank buying, but the Chinese Central Bank has not issued any statements about the size of reserves of gold bullion since 2009, so as thus by 1054.
