Gold demand hit 10-year high last year

[CHIMO]

Demand for gold reached a 10-year high with spending reaching a value of $150bn (£93bn) in 2010, as Chinese and Indian consumers increased jewellery purchases and the world's central banks became net buyers for the first time in more than two decades.

Figures from the World Gold Council showed demand for jewellery grew 17% over the 12-month period, while overall demand for gold was up 9% despite record prices for the precious metal.

On Thursday the value of gold rose for the fourth day in a row to hit $1,378 an ounce, as investors piled into the commodity as a safe haven amid increased political instability in the Middle East.

Chinese jewellery demand last year reached a record figure of 428 tonnes while Indian jewellery needs were raised by just under 70% after a dip in the market during 2009 caused by recession.

http://www.guardian.co.uk/business/2011/feb/17/gold-demand-hits-10-year-high

[BlueDog22]

1. Gold Prices

This is really common when people are uncertain about the future of the economy. A lot of people see gold as a "safe" investment so they invest in it instead of putting their money into bank accounts, stocks, notes or bonds. I personally don't believe that the increase in gold prices is sustainable and some people are going to lose money when it starts going down.

[Art_from_Ark]

2. So what do you think is a sustainable price for gold?

Personally, I think the trillions of new dollars, euros, pounds, yuan, etc., being created out of "thin air" is unsustainable.
What we have here is traditional secure money that is produced gradually in relatively known amounts versus increasing amounts of paper money which dilutes the value of existing paper and can be produced at any time in any amount with little accounting.

[cutlassmama]

3. Paulson is heavily invested. He said it will go up to $2,400 an ounce

in two years.

[Art_from_Ark]

4. Who is Paulson

and what sort of special powers does his crystal ball have?

[Po_d Mainiac]

13. Google Paulson/Goldman/Hedge Fund

No need for a crystal ball...

[Art_from_Ark]

15. If the "Paulson" who came up in my Google search

is the one you're referring to, I wouldn't put much stock in his prediction. He sounds like a pretty shady character.

[upi402]

5. In Asia they buy their gold in the form of jewelry, not in minted coin form

High society may do it otherwise. But regular folks invest in gold this way from what I've seen.

[Art_from_Ark]

6. There is jewelry gold, and there is coin gold

Investors in much of Asia prefer coins and/or bars. That is certainly the case in Japan, where jewelry is almost strictly for ornamental purposes, although some women like to wear bullion gold coins in pendants.

[upi402]

7. For example

I'm no expert in commodities, jewelry, or numismatics.

But in Thailand, gold shops sell 95% to 99% gold. Usually 96% on the stamp. But it is jewelry, so it is what it is!
People 'talk-to-talk' about any shop that cheats. Chinese gold shops are rife in Bangkok's Yaowarat district, where even tuk-tuk drivers know the percentages at different shops -it's common knowledge.

They also have a street version of gold jewelry value that relates to their currency; 1 Bhat, broken into four segments of 25 Satang for each level of weight and quality. I don't understand it at all.

People on the street don't buy bars or ingots there, they invest via jewelry. India and Thailand use gold during marriage. Thailand is the opposite of India in that, the bride's family pays in Indai, but the groom pays in Thailand as a 'thank you' to the parents for raising such a wonderful wife. The daughters support the grandparents so when they are taken from the family - and there's no social security for her parents- the groom steps up and is proud to help and show respect. Gold is a symbol he is able to care for his new wife. Tong mun.

Japan is much more like the west, I'm told, and thanks for the info. I'd love to learn about Chinese working class gold investment vehicles. That's a huge market.

[Art_from_Ark]

8. Interesting contrast between Japan and India/Thailand

As for Chinese working class gold investment vehicles, I have heard that jewelry is common, although the Chinese government is also producing "Panda" gold coins in weights as low as 1/20 of a troy ounce (about the same weight as a copper penny), which would conceivably be within reach of the working class investor. However, it would still represent a significant chunk of change to someone making $300/month in a factory. The nouveau riche in China, on the other hand, seem to prefer bars and larger bullion coins.

[upi402]

9. The Panda Gold Coin

looks to have a black background (lacquer?). So it's not as pure as the Canadian Maple. The panda coin is sleek though;
http://www.amazon.com/Republic-China-2000-Panda-Gold/dp/B000K67QM4

In SE Asia they say that the Chinese are the Jews of Asia. I think that must have westerner roots and may be jingoistic but nobody agrees that it is. They certainly seem to be a major element of the merchant class. So there are likely repressed and underground entrepreneurs in China looking to hide some wealth with possession gold.

[Art_from_Ark]

10. The black background of the pandas is probably an optical illusion

The fields (backgrounds) of certain specially struck proof coins will look black when viewed from the right angle. The coins says .999 so I assume it is pure.

At any rate, $950 is a lot to pay for a 1/10 oz bullion gold coin, even at today's prices.

[Po_d Mainiac]

12. $170 max. n/t

[Art_from_Ark]

16. Even at $170, it's probably overpriced

although the panda coins are kind of cute, and I have heard that the 1998 1/10-ouncers are actually commanding a premium among Chinese buyers.

[Po_d Mainiac]

11. Not a black background..It's a proof strike

Proof strikes on gold coins are very reflective..Note the buffalo below appears to have a black background also. Scans often produce black background appearance, whereas pictures usually won't. It is also seen on proof strikes of silver coins.

http://cgi.ebay.com/2008-W-10-GOLD-BUFFALO-PROOF-NGC-PF70-BOX-COA-/280527883453?pt=LH_DefaultDomain_0&hash=item4150c3ccbd

[Art_from_Ark]

14. The "black" fields of some proof silver coins can be stunning

Proof Franklin half dollars, for example, can command a very high premium if they exhibit a black field with white raised devices, like a cameo effect.

[Po_d Mainiac]

17. Ah the ever elusive DCAM Franklin with FBL

One of the biggest eBay scams is the so-called unopened/sealed envelope proof sets that might have the frosted bell and inventor with mirror fields.

[Art_from_Ark]

18. I bought a bunch of proof sets back in the '80s

looking for DCAM Franklins, but the best I could find were some semi-cameo Franklins and a couple of not-so-deep-mirror cameo Roosevelt dimes. I imagine that in the ensuing 20+ years, whatever proof sets remain intact have been picked over and picked over again.

[barb162]

19. I'm going to shine up my one ounce Canadian maple leaf right now

I bought it years ago in the $600 range. Had a nice gold necklace attached on the matching setting.

[Art_from_Ark]

20. If you "shine it up",

you'll probably decrease its value.