-Craig Smith, CEO, SATC
Jan 15, 2004
In 1997, I wrote "China, The Economic Dragon," discussing the potential impact when one-fifth of the world's population are turned loose on the world's free marketplace. Now China is fast becoming a world leader in the worldwide rush toward gold.
For example, our readers may remember that we reported last October that even "Chinese banks are going for gold." Let's face it, China wants to be become a world leader on a par the U.S. Therefore, we can deduce that as demand grows in 2004, today's slow-moving gold rush could jump into high gear, here's why;
Six reasons China will drive gold prices up in 2004 ...
1) Bank of China estimates $36 billion could rush into gold when 1 billion Chinese citizens are once again allowed to own gold.
2) 20 per cent of Chinese said they were willing to spend 10 to 30 per cent of their savings in gold investment, indicating a huge potential demand for gold.
3) U.S. forecaster Jay Taylor; "Gold could quickly rocket to $600 an ounce...creating a immediate new market for 96 million ounces."
4) The Shanghai Gold Exchange, initiating free trade in gold last year for the first time since 1949, so far serves only institutional traders, rather than individuals.
5) Gold prices in China have risen more than 25 per cent since the Shanghai Gold Exchange started operating in October, 2002.
6) Strong growth is expected in domestic gold demand over the long term as individual incomes continue to increase, according to ChinaDaily Newspaper.
-- First, per capita annual gold consumption in China is only 0.2 grams, far below that in Western and other Asian countries. The figure for India is one gram, while the United Arab Emirates averages the highest at 30 grams.
-- Second, the demand for gold for industrial use will also increase rapidly as China becomes the world's manufacturing center. Currently, 90 per cent of the gold consumed in China is used to make jewelery.
-- Third, the potential for individual investment in gold as an option to currencies to maintain private wealth is almost unlimited. Uncertainties about worldwide political stability and economic growth have strengthened this function of gold.
The introduction of individual traders in the gold market will,
according to gold experts and officials:
-- invigorate flagging consumption;
-- slash the foreign trade surplus;
-- trim conspicuous foreign exchange reserves;
-- ease international pressures on China to appreciate its currency.
As much as 300 billion yuan (US$36.15 billion) in private money is estimated to flow into the gold market, creating demand for about 3,000 tons of gold. A market demand for 300 to 500 tons of gold will be created by individual traders in the initial stages. Full Story
China is not the only nation driving gold prices up!
Japanese investors are dumping dollars and buying gold too! In India, owning gold has been allowed for the first time in 40 years. Russia and Middle Eastern nations also have increasing demand. Malaysia is spearheading the gold "dinar" -- a 100% gold-backed currency/coin together with 53 Islamic nations.
Given these facts, Americans need to increase their personal gold holdings before prices rise another 50% in the next two years (from $420 to $600 per ounce) just like it has in the last two years (from $280 to $420 per ounce.
My conclusion is simple: GOLD: OWN MORE IN '04!
Request my 2004 Gold Rush Kit ... FREE to serious investors who want to understand today's exciting gold and coin markets.
China Financial News & Views:
Will China Avoid Japan-Like Debt Nightmare? -Bloomberg
Follow The Money to China -Derry Brownfield 12/29/03
China gold miner soars 73% in Hong Kong debut 12/23/03
China May Need to End Currency Peg -CBS.MW 12/8/03
Chinese banks going for gold -Craig R. Smith 11/24/03
GOLD'S BULL IS ALIVE AND WELL - AdenForecast 10/22/03
China Development Bank Sells $500 Mln Bonds -Bloomberg 9/21/03
Further news search on China ... at SwissAmerica.com