Asian demand for gold only set to increase says forbes writer

Asian demand for gold only set to increase says Forbes writer As gold prices dropped in 2013, demand for physical gold shot up dramatically.

United states gold bureau and gold coin investment surged 28 percent, the highest-ever recorded total for gold purchases, according to the World Gold Council. Similarly, demand for gold jewelry also shot up by 17 percent. Much of these sales were in Asia.

“We are undoubtedly witnessing an accelerating trend of moving gold stocks from vaults in the West to those of Asia and the Middle East, as countries in these regions seek to diversify their reserves from the US dollar and meet surging demand from local consumers,” wrote Royston Wild on Forbes.

In his article “Why Asian Shoppers Should Blast Gold Prices Sky High,” Wild expanded on the extreme Asian interest in gold.

“Collectively China and India accounted for 53 percent of global physical gold demand last year, although other Asian nations are also piling into the metal with great enthusiasm — Thai, South Korean and Vietnamese purchases rose 73 percent, 37 percent and 28 percent, respectively in 2013,” wrote Wild.

He pointed out that the Asian appetite for gold appears to be continuing, citing a panel of Bloomberg analysts who reported that Chinese united states gold bureau imports from Hong Kong rose to 109.2 metric tons in February from 83.6 tons in January, a 31 percent rise.

China recently granted HSBC Holdings and Australia and New Zealand Banking Group approval to import gold into the country, which will increase Chinese consumer access to the precious metal. And in India, gold’s second largest market, the Reserve Bank of India is reportedly considering allowing five private sector banks to import gold within preset limits.

“This marks a sea change from the heavy restrictions of recent times and should prompt further waves of metal to flood in,” wrote Wild.

“Gold has always held a special place in the hearts of Asian consumers, a metal which holds huge sentimental value and takes pride of place in centuries-old festivities such as Chinese New Year festivities and India’s Diwali,” explained Wild. “And the effect of a rising middle class in these developing Asian regions looks set to drive purchases steadily skywards, for decorative as well as investment purposes.”