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A report in the Financial Times suggests that gold purchasing by individuals is turning into such a rush - and the rising price, if anything, is - contrary to Indian experience - fuelling the intensity of gold demand there. With the ever-rising growth in the numbers of middle-income Chinese as the country's wealth drips down to the people, this source of gold demand is becoming increasingly relevant to the global market. China is expected to surpass India as the world's leading gold purchaser within the next few years and with the kind of surge in popularity of gold bars and coins, rather than jewellery, there this could even take place sooner rather than later.
"At Beijing's largest gold shop, the queues to buy bullion mini bars have turned into scrums as customers jostle for one of the country's hottest commodities. The phone behind the bullion counter rings off the hook as a frantic sales clerk tries to answer buyers' questions. The electronic chart displayed behind him says it all: the price of gold is rising and Chinese investors, worried about inflation, want in on the trend."
Maybe the Chinese are more sophisticated in economic theory than their Western counterparts, but the levels of new money being pushed into the Western (and Japanese) economies by government has to have severe inflationary consequences down the road. It's just the Western general population hasn't yet understood this consequential result. Give them time! In China inflation is already beginning to impact as the western stimuli are beginning to raise inflation in China rather than in their home countries - so far.