China: Soon to Be World’s Biggest Gold Importer, If It Isn’t Already

Gold's latest helper is the Chinese central bankers who appear to still be buying a lot of gold. China's private and public sector gold buying may have just pushed the country past India as the world's biggest buyer. Gold experts expect this to be a factor in future gold prices.

By Brendan Conway
February 6, 2013, 11:15 A.M. ET
Barrons

The argument for owning gold usually centers on the Federal Reserve. But the metal’s least recognized helpers may be Chinese central bankers, who still look like they’re buying gold with both hands.

Private- and public-sector gold buying in China may have just pushed the country past India as the world’s biggest buyer.

Commerzbank’s strategists point this morning to fresh statistics out of Hong Kong showing that year-on-year gold imports almost tripled in December, to 114 tons. Do the math and China is ready to move into the top spot globally if it isn’t there already.

” If it is assumed that China itself produced almost 400 tons of gold last year, the total Chinese gold demand will have been over 950 tons, which would mean that China had overtaken India as the world’s number one consumer of gold on a yearly basis,” writes Commerzbank this morning.

Gold bulls expect this to be a minor factor compared to the presumably destructive aftereffects of the Fed’s quantitative easing on the dollar. But every buyer counts. Especially when they’re approaching 1,000 tons annually.

Gold is essentially flat on the year as of this writing. The SPDR Gold Trust (GLD), iShares Gold Trust (IAU) and ETFS Gold Trust (SGOL) are ahead fractionally both today and during 2013.

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