Mainland China Well On the Way To Overtaking India As #1 Gold Consuming Nation

India is still the number one gold-consuming nation, but mainland China is moving in close. If current trends continue, the latter nation will be the #1 gold consumer in a few years.

India, the world's biggest consumer of gold will probably be [overthrown by] China in the years to come, especially if they continue to purchase gold at the current rate. If the Indian investors seem to have become nervous when it comes to purchasing gold as an effect of the rising prices of the glittering metal, the Chinese don't seem to have a serious problem with this.

This has become obvious by the fact that the Chinese government has allowed the public to buy gold as until recently this activity was banned. Also various laws regarding mining for gold are also facilitating gold ownership.

Not only is ownership being facilitated, but also the government is encouraging its citizens to hold 5% of their savings in gold.


This encouragement shows in gold's continued rise. Ironically, the fact that Asian demand is pushing gold up gives central banks an excuse to push back tightening. Their experts can claim that gold's bull market say little about developed-country inflation, as it's being pushed up by developing-country inflation and the wealth effect as played out in Asia. I think this is why the Federal Reserve has ignored gold's rise in its deliberations.

So, there's more scope for gold to rise - and yet another rationale for tightening too little and too late.