China’s Economic Travails Spell Ups and Downs For Gold in 2016

The year 2016 is a year to watch China and the manner in which its gold consumption would move. Forecasts are that its fluctuating economy might have a two way impact on its gold utilization. On the one hand traders would feel attracted to gold investments in a speedy fashion while on the other the country’s slowing economy and raising US interest rates would seem to drive out all fears of inflation hampering China’s progress. According to seasoned financial analysts the strengthening dollar is in all likelihood to infringe upon China’s gold investments and prices.

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Gold Bullion Investment

In the conflicting economic scenario gold in China is caught between a resisted price of $1085 an ounce and a supporting one of $1050 an ounce. If the country fails to break through the former, it would bring the trading price of gold into the $ 1100 figure, if it doesn’t then the metal price could be found moving in the $1000 direction, speedily.

China being a key propeller of gold demand, globally, is also turning into a leading nation internationally, for consumption of gold; the country’s persevering efforts to move gold from west to east in 2013, gives it a lead in the field of gold monopolization. China has been a focus of worldwide attention after acquiring the No 1 position as gold producer in 2007.

Consumer demands in China being strong, jewellery businesses in China have expanded their retail network & stock.

Gold has taken the country with such force that today it is seen becoming an intrinsic part of China’s financial system. The number of gold bullion products being offered to investors and borrowers by banks has also increased.

In another interesting development, China in order to strengthen its planned introduction of a Yuan dominated benchmark price for the metal, has cautioned foreign banks that any interference on their part, in this regard, would be dealt with severely, in some cases leading to a restriction being imposed on their operations in the world’s biggest bullion market.

Though at present the Yuan fix cannot be interpreted as a threat to the gold price sway of London and New York; however things could change, if china’s currency acquired a full conversion facility.

Financial Analysts expect China to grow by 5 % or 6% and not 7% as predicted by the country itself.

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