China hoarded gold in 2013, overtaking India as the world’s largest gold consumer for the first time, after a 28% decline in the precious metal. However, demand is tapering off as gold strengthened 8% this year on increased geopolitical risks, namely in Ukraine and the Middle East. [Uptick in Volatility Good for Gold]
Year-to-date, the SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) have all gained about 8.2%.
Looking ahead, the World Gold Council anticipates that 2014 will be a year of consolidation but expects demand to rise in the medium-term due to an expanding middle class. CGA stated that jewelery demand, which accounted for almost 60% of all private sector gold demand in China last year, rose 11% to 426 tons over the first half. [Asia Holds Keys for Physical Gold ETFs]
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Max Chen contributed to this article. Tom Lydon’s clients own shares of GLD.