The Dubai Gold and Commodities Exchange has seen record volumes in the last month. Year-to-date volumes were up 56% from the same period before. This robust figure helped the DGCX’s gold futures contract increase its market share in Asia by 2%.
In total, the WGC report states that in 2012 the gold industry generated over $210 billion in to the world’s economy in 2012. This is the equivalent GDP to the city of Beijing or the Republic of Ireland.
The Chinese government acknowledged gold as a strategic asset in 2000, when it included the establishment of an open gold market in its five year economic plan. Since then China has come to play a significant role in the international gold market as it strives to develop and advance all aspects of the industry and gold’s role in the domestic market.
In the last 100 years China’s gold mine productivity has climbed from just 4 tons of gold in 1949 to an expected 440 tons this year, none of which is exported. Hong Kong imports have been more than 600 tonnes this year alone, but still more gold is demanded.
Both gold and silver’s gains outpaced those of other markets. The 1% drop in the dollar went someway to underpinning the gold price. In a 9:1 vote the Committee refrained from tapering QE, citing tight fiscal policy and a rise in mortgage rates as its reasons for doing so.
Later this afternoon the Federal Reserve’s FOMC is widely expected to announce tapering of QE. Many analysts have stated that should QE be tapered then the gold bull market will almost certainly be over.
When it comes to gold, everyone’s been looking at the wrong data. Rather than looking at the price of gold (which has climbed for the last 12 years); we should be looking at the value of the currencies we’re buying it in.
The statistics on presidents and gold prices since Richard Nixon make for some interesting reading; some surprising and some not so surprising trends exist. Our main findings show that voting Obama is best for the gold price.