China & India Help Propel Gold Demand to Four-Year Highs - Nathan McDonald (03/04/2019)

April 03, 2019

The trend toward precious metals, most notably gold bullion, continues onward, with a recent report from consultancy firm Metals Focus predicting that the world will consume 4,370 tonnes of gold throughout 2019.

This is a very positive development for precious metals advocates indeed, as this would mark the highest level of consumption for the yellow metal since 2015.

As of late, this trend has been largely driven by eastern central banks, such as Russia, China, Turkey and a few select others I have reported on extensively over the past year.

These central banks, wise to what is unfolding in the world, will continue to play a major role in driving the demand for gold bullion higher. However, now it’s being reported that consumer demand is returning in a major way, adding yet another pillar of demand.

This consumer demand is coming in the form of gold jewelry, which India and China are heavily buying once again.

It is expected that gold jewelry demand will increase by 3% this year in China and 7% in India.

These two countries are the largest purchasers of physical gold jewelry, but what many are unaware of is why these countries continue to purchase this asset.

In the West, jewelry is often bought as a luxury good, a novelty and not as a form of investment.

In countries such as China and India, along with many others, gold bullion in its bar and coin form are of course purchased, but what many may be unaware of is that physical jewelry is a commonly purchased investment asset as well.

The reasons for this are many, but one undeniable fact is that precious metals jewelry offers a much easier way to move your assets in a time of need, as these items can simply be worn by you and your family members.

Take these two scenarios into consideration:

1) You attempt to board a flight to another country with a stack of gold coins in your possession.

2) You attempt to board a flight wearing a .999 gold necklace.

One is considered a fashion accessory in many countries, while the other is looked at as money. One is more likely to go unnoticed; the other is likely to raise red flags.

In reality, both are money, but which is more likely to be confiscated? I think you know the answer.

With both central banks and jewelry demand picking up, the last pillar that will ultimately drive gold to new heights is undoubtedly going to come.

Investment demand in the West is already picking up among the "smart money" crowd, as they can see the writing on the wall and understand what is coming for the global economy.

We stand on the precipice of a major economic global correction, whether it will be started by the madness that is erupting in Venezuela or the chaos that continues to unfold around BREXIT.

Perhaps it will come from within the United States, as we head into the 2020 election, which I am predicting will be bloody and vicious in both a literal and figurative sense.

Total demand for gold bullion is expected to be 4,370 tonnes this year, which is very significant in its own right.

However, I believe as we move forward—and as things continue to unfold across the globe—this will look small in the not-too-distant future.

The trend toward precious metals continues onward.

It is only a matter of time before physical demand overwhelms the fraudulent fiat paper gold price markets and breaks free to new highs, leaving these suppressed prices as nothing more than a fleeting memory.

Keep stacking.