Chinese Consumer Demand for Gold Up Almost 10 Percent Last Year

Precious Metals

While India may be one of the world’s largest holders of gold, with Indian citizens holding an estimated 24,000 tonnes of gold, other countries are catching up. China is one of those, with an increasingly affluent middle class looking for ways to protect its wealth. While stories abound of Chinese looking to store their wealth abroad through purchases of real estate, there are many Chinese who continue to store their wealth in China. And increasingly those Chinese are looking to gold to keep their wealth safe.

Much of that gold demand comes in the form of jewelry, with overall Chinese demand rocketing 9.4% last year to nearly 1,100 tonnes, nearly 70% of which was for jewelry. That puts China in first place for worldwide gold demand, ahead of second-place India. Demand continued to increase in particular in smaller cities further from the coasts, those cities that have been at the tail end of the Chinese economic boom. That’s a strong indicator that as Chinese citizens become wealthier, their demand for gold will continue to increase.

Gold bullion continues to remain a popular investment choice too, with Chinese demand rising 7.3% last year. As the Chinese government continues to maintain capital controls and crack down on alternative investment options such as Bitcoin, expect more and more Chinese to demand gold. And once China’s real estate bubble bursts you can similarly expect more Chinese to pile their savings into gold.

Gold’s universal appeal is part of what makes it such an attractive investment asset. And as China and other developing countries begin to demand more gold, the gold price will become less dependent on events that take place in the US and Europe. The West may have tried to maintain a stranglehold on the gold market during the Bretton Woods era, but that control is long since gone.

That’s good news for gold investors, as a gold market that is open to market forces is one that governments can’t try to manipulate. With governments and central banks around the world continuing to print money ad nauseam, demand for gold and therefore gold’s price will only continue to increase.

This article was originally posted on Goldco.

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