Whether you are a gold bug or not it's been tough
holding gold in 2013 as gold investors watch the price of gold
drop over 20% in 2013.
Has the appetite for gold dimensioned?
There could be renewed appetite for gold as China launched not
one but two gold backed ETFs on the Shanghai exchange as China
attempts to open the country's gold market. Keywords here
gold backed another words the ETF buys and sells physical gold
similar to the SPDR Gold Shares Trust (
The two funds - HuaAn Gold and Guotai Gold ETFs combined
raised 1.6 billion yuan on its initial round of funding
suggesting investors around the globe are still looking for gold
Although gold's shine has tarnished somewhat in the U.S.
China's gold investment demand is on fire and continue to surge
from 2006's 15 metric tons investment to 2012's 274 metric tons
gold investment. At this rate China's gold accumulation
will crush India's demand for gold in 2013 according to the World
Gold Council. India is currently largest buyer of gold and
China is projected take the title by yearend.
Although China is opening its markets for investors to invest
in gold through these ETFs keep in mind if you by chance have
access to these ETFs emerging markets such as China do not have a
mature trading infrastructure for the commodity and pricing power
may not be as deep as in mature markets.
Also right now the ETFs are primarily held by institutions and
may not trade as liquid as mature markets.
According to the World Gold Council emerging markets make up
the bulk of physical gold demand and are showing signs of
there is only so much physical gold to go around which should
cause price to reflect the increase in demand and in turn
creating demand to pull more metal out of the ground.