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| China has become the world’s largest gold producer |
Throughout the recession gold has been a solid buffer against global financial uncertainty. Spot prices have jumped every year since 2003, rising to $833.70 an ounce by the beginning of 2008 and $1,079.32 by January 1 2010. Global prices continued climbing into the new year, standing at just under $1,130 at midday trading on January 7, defying bears who predicted a crash in early December 2009 when gold hit a record high of $1,215.70. Analysts expect 2010 to be a slow and steady year for gold: no troughs but also no new peaks, nothing to upset the status quo. Richard Leung, an analyst at CLSA in Hong Kong and an expert on China’s precious metals markets, expects the price to stabilize at about $1,100 by the end of the year, with an upper limit of $1,165.
As with virtually every other commodity, China is the key to global gold prices. Industrial and retail demand there is rising by the year, driven by broadly increasing wealth, a weakening US dollar and, at home, rising inflation and increasing consumer liquidity.
