Chinese Bought 54% More Gold Than Did A Year Ago

Reuters reports that

China consumed 706.36 tonnes of gold in the first half of 2013, up 54% from the year-ago period, the China Gold Association (CGA) said in a statement on its website on Monday…

“China’s demand in April and May was unmatched,” said one Shanghai-based trader. “They bought more than anyone and were consistent buyers even after prices recovered a little.”

China’s gold demand could hit a record 1,000 tonnes this year and will overtake India, the World Gold Council said last month.

This is despite all indicators showing Chinese economic growth is slowing down.

I speculated in April that “Physical gold continues to be taken out of the market as individuals in the know use current low prices to stockpile. All the while hedge funds and speculators – and possibly even central banks – are driving the price lower. This is a great opportunity to accumulate physical gold as one day when the currency and banking crisis hits one of the major economies (Germany/UK/US/Japan/etc), there won’t be any physical gold available for sale. This is Gresham’s Law in action. Bad, overvalued, paper money is driving out good, undervalued, gold money. Once the general public catches on to what’s going on here even a marginal increase in physical gold demand will cause shortages to develop and this will cause the gold price to climb much sharper than it has in any point in the past decade.”

I also pointed out a week later that the US Mint ran out of American Eagle gold coin supplies, and that demand for Krugerrands had skyrocketed at FNB Share Investing following the dip in the gold price. This video of Rick Harrison saying he can’t get hold of physical gold in the US tells the same story.

One needs to understand that gold is an alternative currency in competition with the rand and dollar that cannot be printed at will by the billions by central banks. In the current world of severe monetary instability, it is a prudent strategy to continue to accumulate a portion of one’s savings in physical gold. One day there will be no physical gold available for sale at any price, and this is going to force the hedge fund and other speculative community to become major buyers, and will launch the gold price into the stratosphere. Make sure you get your share of gold before we get to that point. The current gold price decline is a huge gift to those who understand what lies ahead for the gold market.