Asian demand for Gold seems to be falling off

http://finance.yahoo.com/news/gold-falls-physical-buying-lags-115911824.html

This is around the third or fourth article I have read that has hinted that Asian demand for PM's is starting to fade. Since this has been the only stronghold of the PM market as of late, I don't think it should be taken lightly. It has always been my belief that as the middle class grows in Asia and begins investing, they will start out with Gold because it is something they are familar with, but soon grow out of, as they seek higher returns from assets that can build wealth instead of maintain it. We will see how this pans out.

 

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Were they buying less gold in India last year because of fading interest or because of gold import restrictions?

 

I hope gold tanks big time a week or two before they release the Kennedy gold halves on Aug. 5th so they will be cheaper to buy!!

 

After the IPO of ali baba, I don't think they will be interested in static wealth, they are like most, they want 10000% gain in their life time, so I expect a boom of the asian stock markets larger than ours, and then a bust like ours , as even they have similar 'rascals' in their financial works. How do you say Madoff in mandarin


Remember when the BRIC nations were going to clean US and Euro's house and become the reserve currency ( according to bullion websites) back in 2008. What a difference 6 years make.

 

In 2013, demand for Gold was almost certainly curtailed because of the import restrictions in India, but I am referring to more recent events. I am just trying to remember this off the top of my head, but I think demand was down like 26% in the first quarter and restrictions did not get any worse, so I do think we are seeing fading interest.

Now, as you are probably aware, recently India has announced it is relaxing it's restrictions, and it is really just a matter of time until they are dropped, so we will see what happens, but I believe it is something important to watch for anyone interested in the Bullion market.

Mike

 

That is the way I see it, greed will win over and folks will be chasing outsized gains.

 

When is that supposed to drop Jim? I have been considering that one. I know the shenanigans played in Asia, but feel there would be money to be made short term, as the asian market overreacts strongly to anything from their area of the world.

 

http://www.fxstreet.com/analysis/gold-investments-market-update/2014/06/25/

 

"Thank you for your organs."

 

TC, Notice how that article leaves out the 2014 Numbers?????

http://www.bloomberg.com/news/2014-05-20/china-gold-demand-drops-18-in-1q-on-fewer-bar-sales.html

Now there are still folks like the Gold Council, making predictions about Gold demand increasing, but they are just that, PREDICTIONS. Plus, I am not sure if you can consider the Gold council impartial. The above link show the "the tale of the tape" so to say and there is little doubt that Gold demand is down in Asia in 2014.

I am not why we don't read about this on zerohedge.Com though

 

Alibaba IPO --> http://www.forbes.com/sites/stevesc...ling-names-partners-who-will-control-company/

 

I do not believe this would have a significant impact on the market because people will diversify their portfolios and keep gold in mind. Also a good amount of people will stick to the PM markets as they do not want to deal with the risk of the stock market.
Gold is money, everything else is credit.

 

I don't believe this is a valid point. Silver had dropped 60 % and Gold well over 30% and the decline is most likely not over. I would have to put that in a VERY HIGH risk category. When you add the high spread and the lack of dividends or interest, the risk is at least as high, if not higher than the equities market.

 

We are just coming off a PM market bubble that ended 2 years ago. the market is a little shaky right now but we are starting to see some stabilization. Give it another 2-3 years and there will be another boom in the PM market.

 

But what about the risk? You are only talking possible potential here, do you conceeed the point on risk, or do you still believe the PM market will remain attractive because it is a low risk alternative.

 

"Also a good amount of people will stick to the PM markets as they do not want to deal with the risk of the stock market."

I doubt the "good amount of people" part strongly. If you have 10,000 people in your town, how many ounces of gold would the average person have? I would be surprised if it was over 1 ounce. Does the average person have more invested in stock? I think so. But that is supposition on my part.


"Give it another 2-3 years and there will be another boom in the PM market."

Josh , there is NO way you can know this. You can guess and hope and pray, but no way you can know this. If you do, sell everything and buy paper contracts 3 years away and be a millionaire or more. Such statements are foolish.

 

Asia accounts for a large portion of the world's population and I am sure that they want to secure their wealth just as we do and they will do so through gold silver and platinum. They are no different than anyone else on the planet. They will not just abandon PM all at once and jump into stocks.

You are right that nobody can know when the market will boom. I stated this earlier today on the silver will not go over $20 thread. For all we know Gold could be $150/oz in 3 years or it could be $5000/oz. You won't know until it happens. Glad you caught on here desertgem.

 

But this is my point, given the choice of securing wealth or BUILDING wealth, which do you think would be preferred?

 

Just with any investment there is risk. I would not say that PM is a low risk market specially if you have big stakes. I remember when the price of gold & silver was booming a few years ago. A friend of mine made a lot of money when Gold had maxed out at $1900/oz He was heavily invested in gold and made roughly $1000/oz.
He risked it all investing his entire fortune into gold but it did pay off. However his situation probably happens to 1/100 or less. If I were to decide to invest in gold and say I bought a kilogram bar for $44,000. I could sit on it for a decade and then when/if gold booms I may sell it for $224,000 making $180,000 on that kilogram bar. The more likely situation is I buy the kg bar at the same price and 25 years later that bar is worth about $35000 and I am forced to sell it because I need to pay for a new addition to my house. I sat on a kilogram bar for 25 years and I lost $9000.
In my experience the investors that make significant amounts of money buy gold and silver and resell within a year and make short term gains. Constantly they will buy gold then sell gold and buy silver use the silver profit to buy more gold etc...

Basically if you know how to work the market the risk is worth the reward. I think a lot of people know this already and that is why the PM market has been hot for quite some time.

 

My stance on the matter is that people will do both. Everyone should seek out some form of security in their finances. Gold and Silver will secure your wealth to a certain extent. Then you would invest in stocks to build your wealth. If you unfortunately lose a significant amount of money in the stock market you have your PM portfolio that will stabilize you to a certain extent which may or may not allow you to get back on your feet again and reinvest in stocks once your finances are secure again.