China: Gold’s Single Best Friend In Tough Year, According to HSBC Analysts

Analysts James Steel and Howard Wen came out and boldly stated what has become slowly more obvious to gold-market watchers in the past few weeks, as steep price plunges, fears over slowing the Federal Reserve stimulus and Indian gold shortages have wiped out market interest in the metal.

“China’s brisk appetite for gold is the single most bullish factor in the gold market, in our view,” read the research note issued Tuesday.

That appetite has developed over several years, but it has picked up pace in 2013, to a level that is arguably unsustainable.

China could beat India as the world’s largest consumer of gold this year, with expected consumption of more than 1,000 metric tons. Recent customs data show that China imported 826 tons of gold from Hong Kong in the nine months to October 2013, more than double the same period last year.

China even has its own "Golden Week" of holidays in October, where shoppers flock to Hong Kong to buy gold jewelry, though the holiday is not named for the precious metal.

“Projected income gains by the World Bank and HSBC growth forecast imply that China will remain a strong buyer of bullion,” wrote the two analysts.

An expanding middle class with a taste for gold gifts and jewelry means that rising demand is a long-term trend, according to industry experts.

Read More: www.ibtimes.com/china-golds-single-best-friend-tough-year-according-hsbc-analysts-1458714