+ 2.03
+ 0.61%
+ 2.82
+ 0.84%
+ 3.01
+ 0.74%

Emerging Markets Are On A Gold Buying Spree

April 17, 2019 4:28 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

Emerging markets are scooping up gold, and it could be good news for gold prices and investors.

The Numbers

Recent data from The People’s Bank of China indicates China boosted its gold reserves to 60.62 million ounces during the month of March, up from 60.26Moz in February. Over the past four months, China has upped its gold reserves by a total of 42.9 tons.

At the same time, Russia is also beefing up its gold holdings. The World Gold Council reports that Russia bought about 274 tons of gold bullion in 2018 valued at about $11 billion. In February 2019, Russia singlehandedly accounted for 1 million ounces of gold demand, roughly 6 percent of the world’s total demand.

In addition, demand for gold in India is expected to get a boost from the upcoming wedding season. Gold is traditionally a popular wedding gift in India, host to roughly 20 million weddings per year with guest lists commonly in the 3,000- to 6,000-person range.

Gold Demand Drivers

Experts say U.S. dollar weakness is one of the key drivers of gold demand in emerging markets in recent months. In addition, downward revisions to global growth forecasts and increasingly dovish central banks is creating demand for risk-averse asset classes.

“The recent revision of the global growth forecast to 3.5 per cent, from 3.7 per cent, by IMF further made investors watch out for the yellow metal and other risk investment assets,” Vinod Jayakumar of Karvy Commodities recently said.

For investors in gold ETFs such as the SPDR Gold ETF (NYSE:GLD), emerging market investments could help drive prices even higher. The price of gold is up 5.2 percent in the past six months to $1,276, but Goldman Sachs recently forecast that gold prices will hit $1,450 within the next year.

Related Links:

IMF Cuts Global Growth Forecast

Experts: Bitcoin Will Take Down Gold, Fiat Currencies

Related Articles

If You Invested $1,000 In the GLD Gold ETF 1 Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return over the last 12 months is 74.3%. But there is no question some investments performed better than others along the way. read more

Millennials Are Twice As Likely To Buy Bitcoin Than Gold As Safe-Haven Investment

Unprecedented government stimulus measures, an ongoing global pandemic and a stock market at all-time highs have many investors looking for a safe-haven investment in 2020. read more

Gold Hits Record High As US-China Relations Deteriorate Further, Bitcoin Crosses $10,000 Mark

As China and the United States forced each other’s consulates to close in key cities, investors flocked to safe-havens, driving gold prices to a record high, while market sentiment remained mixed in Asia on Monday. read more

Bitcoin Is Still Failing As A Flight To Safety Investment