Amid all the financial doom and gloom going around at the moment, it’s noteworthy that the world’s most ancient store of value is still selling like hot cakes in the East. The Telegraph reports:
Stocks of physical gold crossed continents in the first half of 2013 as Westerners dumped their holdings and, on the other side of the world, the resulting fall in price sent consumers flocking to jewellers and bullion dealers.
Indian, Chinese, Thai and other Asian consumers flocked to jewellers and bullion dealers to build their holdings.
The trend, disclosed in the latest data from the World Gold Council, a trade organisation established by the gold mining industry, highlights the different ways in which gold is viewed and owned around the globe. The figures below show global demand for the metal in tonnes, in the months April-June 2013.(Click the image for a larger view)
Jewellery demand was up 37pc over the same period in 2012, reaching the highest level since 2008. Bar and coin investment was also up by a huge 78pc year on year. This purchasing was concentrated in China, India and the Middle East, the WGC said – while selling was largely concentrated in western markets.
There’s more at the link.
Too many Western investment advisers make the mistake of comparing precious metals to stocks and shares, pointing out that the former yield no dividends and (over the long term) have historically offered little prospect of capital appreciation compared to the latter. They miss the point. What Indian and Chinese investors want is security. Gold, silver and precious stones have for millennia been stores of value – a way to preserve one’s capital when all other means fail. National currencies can collapse; land can be confiscated; art can fluctuate in value along with the market, and is vulnerable to theft and natural or unnatural disasters; but precious metals (particularly gold) and gems have almost always retained their worth, and usually increased in value in time of emergency.
(They’re also relatively portable, occupying little space and easily concealed in small quantities, so that if one absolutely has to ‘get out of Dodge’, they offer a way to take your assets with you. I’ve personally witnessed, in Africa, a car’s wheel bearings being unpacked as soon as it was safely across a border and around a few corners, out of sight of the customs officers. From among the bearings emerged several dozen heavily greased gemstones, none the worse for their rough transit. Their super-hardness trashed the wheel bearings, of course, but the latter could be – and were – easily replaced. All that mattered was that they lasted long enough to get across the border!)
I can’t afford to buy gold for myself, but in the light of current economic circumstances, I sure wish I could . . .