The following details on Asian gold demand are from the weekly metals report released by Mike Fuljenz from Universal Coin and Bullion in Beaumont, Texas:
Some key demand factors for 2015, mostly centered in Asia:
India is once again #1 in gold jewelry demand, according to media giant Thomson Reuters' report, GFMS. With some of their restrictions on gold imports being lifted, along with a slight decline in Chinese demand in 2014, India regained its top national ranking among gold buyers. GFMS reports that in 2014 Indian jewelry demand rose by 14% to 690 tonnes (a metric tonne equals 2,205 pounds), eclipsing China’s 608 tonnes. The rivalry will be fierce this year, with the world’s two top nations competing in something like the Super Bowl of gold demand.
China buys more gold bullion than jewelry. Last year, withdrawals from the Shanghai Gold Exchange (SGE) totaled 2,102 tonnes, not counting imports through Hong Kong or Beijing. The SGE is new and is now the main barometer for measuring Chinese demand, eclipsing Hong Kong. (Beijing imports are for the central bank and they are NOT reported, since the Chinese government wants to mask the total of its official gold holdings.) The SGE recently said that it will soon begin offering gold derivatives (options) on a trial basis. This is important since Chinese leaders had previously banned options as “speculative.”
Russia is another vital source of ongoing gold demand. Due to a falling Russian ruble, the Russian central bank has been exchanging worthless paper for gold throughout 2014. The Russian Central Bank bought 5.5 million troy ounces of gold (171 tonnes) in 2014, including 10 straight months of at least 300,000 ounces per month. Over half their annual purchases came since September, when they bought a record monthly total of 1.2 million ounces. Russia now holds 38.8 million ounces (1,207 tonnes), vaulting Russia into the sixth spot, behind only the U.S., Germany, the IMF, Italy and France in gold holdings.
Kazakhstan, a former Soviet client state, has been buying all of the gold the mineral-rich country mines each year, which amounts to 22 metric tons. Albert Rau, the nation’s Minister for Investments, said, “Given the turbulent global economy condition, the National Bank has been buying out all the fine gold produced.” He cited the “volatility of major currencies,” especially the weak euro, while saying “gold is seen as a stable harbor.” He was also open to smelting the nation’s gold to sell to its private citizens, explaining “There’s never too much money in a family. In the same way, there’s never too much gold.”
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