China Retail Gold Survey 2013: China’s gold market takes its own path

Activity and prices remain buoyant in China’s gold markets despite the slip in prices in the west.

China Retail Gold Survey 2013: Results index
Commentators calling the decline of the Chinese economy clearly haven’t told the country’s gold market investors. China’s economy is growing at its slowest rate in three years – 7.5% in the second quarter – but Shanghai premiums on gold bullion stood at more than $30 an ounce above the international benchmark set by London pricing, at the time of writing in mid-July.

Why? Partly, this is because household consumption is a very low part of GDP in China, so it’s not so odd for demand to be increasing at a household level while overall GDP growth declines. But it’s also because physical demand for gold in China is robust both at the individual level and through central-bank buying. According to gold market observer Goldseek, gold exports from Hong Kong to China were up 68% year on year by early July. ...