Gold Sales to Asia Spike
by Jason Simpkins, Outsider Club
While gold has largely been shunned by the West, it’s never been more popular in Asia.
Halfway around the world, members of the emerging middle class are adding to their personal holdings drumming up demand for jewelry and bullion. And the Shanghai is rapidly evolving into the new center of global trade, overtaking London and New York.
This is evidenced by the rate at which gold has been fleeing the United Kingdom and heading east by way of Switzerland.
Last month, the U.K. exported 97.2 metric tons of gold to Switzerland (the most since November), which in turn sold it on to China and India.
China imported 46.4 tons, up from 23.6 tons in February. India imported 72.5 tons. And Singapore imported 29 tons.
In all, Swiss gold exports increased 65% to 223.3 tons – the highest level since 2013.
The reverberations of that massive gold transfer were felt on the Shanghai Gold Exchange, where volume for the benchmark gold contract jumped 60% from the previous month to a record high.
The state-backed SGE deals solely in physical gold bars and not paper contracts or unallocated bullion bank accounts.
This is all part of a global mega-trend that started decades ago, and will last decades more.
Gold demand in Asia is poised to double by 2030, rising to 5,000 tons from its current level around 2,500. The result will undoubtedly be me a massive surge in gold prices which are likely to hit a new record high.
This most recent buying spree has been prompted by gold’s recent decline. The metal is at its lowest level since 2010, after posting its first back-to-back annual drop in 14 years in 2014. Conversely, stocks and the dollar have been on the rise.
Don’t be fooled, though. The stock market has been in bubble territory for more than a year now, and a reversal is inevitable. The dollar’s days are numbered, as well.
Asian demand for gold, on the other hand, is only just warming up.