by Eric Hommelberg
Dec 21, 2004
 

[UNDER CONSTRUCTION, ONLY PREVIEW AVAILABLE]
 

This is chapter V of the Gold Drivers report. It discusses the increase in demand for Gold and and its future trends.

Demand for Gold is growing these days. It comes from several sectors such as , producer dehedging, increase of investment demand, shift from CB selling into CB buying etc. Just China itself will contribute considerably to the expected increase in demand for Gold. Last year the Honk Kong edition of Friday’s China Daily quoted the Bank of China’s bullion guru saying : “local consumers could pour $36 billion into the metal, equivalent to around 2,950 tonnes, or more than one year of supply, at current prices.” Xi Jianhua, the Bank of China's gold business expert, is also quoted saying that it would be "safe and feasible" for China swap to some foreign exchange reserves for gold. Furthermore the World Gold Council reported that Chinese demand for Gold is expected to triple in next few years. Besides China, also the CB’s of Russia and Argentina are accumulating Gold. Regarding Producer dehedging expect this program to continue at the rate of at least 300 ton/year coming years. Hedging is dead and won’t be reinvented this decade. This should be obvious when the king of hedgers Barrick Gold announced earlier this year that they won’t do any hedging anymore for the next 10 years ! Furthermore issues such introduction of Gold ETF’s and industrial Gold demand will be covered.

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