Poll: Asia demand 70% of total?

RedTiger

Julian Philips at Kitco writes that 70% of the demand for physical gold is from Asia (Kitco link) and that sounds dubious to me. Other online sources that I might get from a search might be equally as dubious. I want to see what folks here think.



<< <i>the U.S. accounts for only 8% of gold bullion demand whereas Asia accounts for more than 70% of gold coin, bar, and pure gold jewelry demand. >>



What say you?

If that number is close to true, folks here might consider paying a lot less attention to what the U. S. Fed and European central bank is doing, and a lot more attention (70% worth) to economic trends and monetary policy in China and India. Seems like 90% of the commentary on this forum is about the U. S. deficit, and Bernanke and Geithner, when if what is written is close to accurate, the folks driving the gold bus are Asians not Americans.

streeter

I thought the gold market was driven by the INDIA jewelry market for dowry.

Rupee is sick right now.

secondrepublic

I read a similar statistic recently. The World Gold Council says on its website that "East Asia, the Indian sub-continent and the Middle East accounted for approximately 70% of world demand in 2009." India alone is 27% of world demand, and as the website points out, Indian demand is driven mainly by religious/cultural reasons. Link. I have no reason to doubt the 70% number.

TheTalkingWalnut

lol

Spooly

I bet Europe is sucking up more gold and silver than people really know about.

derryb

<< <i>What say you?

If that number is close to true, folks here might consider paying a lot less attention to what the U. S. Fed and European central bank is doing, and a lot more attention (70% worth) to economic trends and monetary policy in China and India. Seems like 90% of the commentary on this forum is about the U. S. deficit, and Bernanke and Geithner, when if what is written is close to accurate, the folks driving the gold bus are Asians not Americans. >>


Asians are driving the bus that will ultimately affect gold investors and speculators. Monetary policy and central banks, particularly the FED, are driving the bus that will affect the gold buyer who holds gold to protect the value of his savings and it's buying power.

RedTiger

<< <i>

<< <i>What say you?

If that number is close to true, folks here might consider paying a lot less attention to what the U. S. Fed and European central bank is doing, and a lot more attention (70% worth) to economic trends and monetary policy in China and India. Seems like 90% of the commentary on this forum is about the U. S. deficit, and Bernanke and Geithner, when if what is written is close to accurate, the folks driving the gold bus are Asians not Americans. >>


Asians are driving the bus that will ultimately affect gold investors and speculators. Monetary policy and central banks, particularly the FED, are driving the bus that will affect the gold buyer who holds gold to protect the value of his savings and it's buying power. >>



The linked article also mentions that Asians tend to shun paper gold, the futures, the options, the ETFs. So it begs that age old question, does physical demand drive the paper market? Or does the paper market drive the physical demand? Do they take turns as lead dog (my answer)? If the U.S. is only 8% of the demand for physical, events in the U.S. aren't worth 90% of a person's time, if gold is a person's primary interest. In the various mega threads, less than 5% of the posts focus on Asia, maybe 90% focus on the U.S. Fed and/or U.S. budget deficit and/or U.S. politics. People can rationalize their actions any way they want, but if the physical demand numbers are accurate, spending 90% of analysis and reading time on U.S. politics and Fed monetary policy is not an efficient or logical way to allocate time and energy, if a person is primarily interested in the gold market.

Baley

I think you're right about Asian demand for gold. It remains a commodity, subject to the aggregate market and in competition with other assets

derryb

<< <i> The linked article also mentions that Asians tend to shun paper gold, the futures, the options, the ETFs. So it begs that age old question, does physical demand drive the paper market? Or does the paper market drive the physical demand? Do they take turns as lead dog (my answer)? If the U.S. is only 8% of the demand for physical, events in the U.S. aren't worth 90% of a person's time, if gold is a person's primary interest. In the various mega threads, less than 5% of the posts focus on Asia, maybe 90% focus on the U.S. Fed and/or U.S. budget deficit and/or U.S. politics. People can rationalize their actions any way they want, but if the physical demand numbers are accurate, spending 90% of analysis and reading time on U.S. politics and Fed monetary policy is not an efficient or logical way to allocate time and energy, if a person is primarily interested in the gold market. >>



Neither. Physical demand depends on spot price and fear of the future. Paper market indirectly drives spot price.

As long as I trade in gold with dollars, dollar policy and its results will be of primary concern to me.

Asian demand is most likely a result of the same factors as US demand. I don't foresee Asians dumping gold and flooding the market any time soon. And even then I would expect it to be confiscated first. There is a very good chance that their central bank is letting the citizens buy if for the bank's future confiscation. That's one way to stock the vaults.