HSBC predicts increasing demand for gold in Asia
China, India and Vietnam account for around 60% of global gold consumption, up from around 35% as recently as 2004. HSBC Asia predicts this consumption will increase in coming years given rising inflation. Whilst the Indian government tries to suppress this through import restrictions they are still targeting imports of 800t in the coming year which is only 45t down on the free market last year, and of course doesn’t include the now rampant smuggled gold imports. Indian inflation is predicted to be 7.7% and 7.9% over the next 2 years and China’s is on the rise (and despite ‘official’ numbers here you know your cost of living is going up too). Gold and silver are their main means of protection against this. On strong demand premiums paid for legitimately imported gold to India exceeded $100/oz last week meaning they know this is still good buying even at these premiums. We in Australia pay a small fraction of this, enjoy these current low prices, and observe this once in a generation transfer of gold (real wealth) from the weak speculative hands of the debt laden, money printing West to the strong strategic hands of the East.