Chinese housewives buy 300 tons of gold

Vatic Note:  This pretty much speaks for itself.  My two cents is this.  "Why does Rothschild have massive warehouses full of Gold and silver?  Why is he selling the gold to multimillionaires and housing the physical gold in those warehouses?  He sells the gold for US Dollars,  why?  I thought the US dollar was seriously at risk?"  So many questions about the whole issue of gold and price supports, and the Rothschilds,  but no answers.

Gold is also used for jewelry and that market operates differently, however, more and more consideration of gold as a commodity is going  into decisions to purchase necklaces and jewelry as gifts, with the idea that it can be eventually taken apart and used for bartering if necessary.  Anyway, this was a very educational piece in an area where I have very little background and knowledge, so this was good for me as well.

Chinese housewives buy 300 tons of gold
2 May 2013, by Barbara Kollmeyer (MarketWatch - Blogs)
Customers browse gold jewelry in Hong Kong, China - Bloomberg
They are numerous and thumbing their noses at Wall Street, evidently. And perhaps they offer some explanation for the turnaround in gold lately.

On Thursday, the Shanghai Daily reported on a “Voice of China” radio program that claimed Chinese housewives are propping up gold prices. The program said those women reportedly spent 100 billion yuan ($16 billion) over the past two weeks, buying up 300 tons of gold and helping keep prices steady at around $1,468 an ounce.

Putting it all in perspective nicely, blogger Max Keiser notes that while Chinese housewives were out scooping up gold, Americans sold $16.6 billion worth in the first four months of the year. (Read: Gold ETF loses No. 2 spot to emerging markets)

It’s not just housewives in China. The China Daily also reported Thursday that Hong Kong retailers were overwhelmed by all sorts of shoppers from the mainland seeking cheap gold over the three-day May Day holiday, with long lines outside gold shops, blocking streets and sidewalks. That echoes what happened in the wake of that historic gold drop on April 15, with shoppers reportedly swamping jewelry stores across Asia. Writing for the South China Morning Post on April 16, George Chen, whose penname is “Mr Shangkong,” wrote of China’s love affair with the shiny stuff.
“It is traditional for the older generation in China to buy gold products for the younger generation as gifts for various occasions, for example, when their children get married and have babies,” he noted. “Some analysts even joked that this time the war on gold prices may be a war between those big Western institutional investors like leading asset manager George Soros (who earlier in April said gold was no longer a safe haven) and Chinese retail investors, including many local housewives.”
But Chinese buyers are going up against Wall Street and some shaky sentiment for the metal.

Robert Jillies over at Sharps Pixley pointed out Thursday that there are plenty of warning signs for gold. He says upside risks for gold have increased as the price nears key $1,500 and $1,522 support levels. He sees a retest of $1,325 in the next few weeks, and notes that that instrumental rebound in physical demand is showing signs of tapering off.
“Gold remains in a bear market and typically, it will need time to find a strong base before embarking on a recovery,” says Jillies.
As for those Chinese housewives, this blogger was unable to listen to that original radio broadcast, but a few questions do come to mind. What exactly is the definition of “housewife” in China? Is she related to “Mrs Watanabe“, the mythical keeper of Japan’s household savings? What chunk of spending power in China does she represent? In other words, how much of a power shopper can gold prices count on here?

Statistical data from Catalyst showed as of late 2011, 71.1% of women between the ages of 18-64 were employed. So the housewife minority is propping up gold? Hmmm…

Here’s another look at the importance of buying gold in China, from a reader of blogger SilverDoctors who had moved there recently and spoke of the frenzy over the Chinese New Year for the shiny stuff. What has he learned? Chinese mothers don’t want vacuum cleaners for Christmas (Yeah? Join the crowd). They want silver or gold. Minimum $80 worth please.

– Barbara Kollmeyer
– Follow this reporter on @MWBarbaraKollmeyer

The article is reproduced in accordance with Section 107 of title 17 of the Copyright Law of the United States relating to fair-use and is for the purposes of criticism, comment, news reporting, teaching, scholarship, and research.

1 comment:

American Action Report said...

The Chinese demand for gold is probably greater by a third than you think. Americans like to buy 18 carat gold because it's more durable than 24 carat gold. Chinese buy 24 carat gold "because we like the real thing."
I suspect that the housewife purchases of gold are straw man purchases to avoid taxes or investigation or some other regulation or restriction.