Chinese housewives buy 300 tons of gold May 2, 2013 9:09:18 GMT -6
Post by jeffolie on May 2, 2013 9:09:18 GMT -6
India's housewives or China's housewives, the biggest gold buyers?
Chinese housewives buy 300 tons of gold
May 2, 2013,
Bloomberg Customers browse gold jewelry in Hong Kong, China
They are numerous and thumbing their noses at Wall Street, evidently. And perhaps they offer some explanation for the turnaround in gold lately.
On Thursday, the Shanghai Daily reported on a “Voice of China” radio program that claimed Chinese housewives are propping up gold prices. The program said those women reportedly spent 100 billion yuan ($16 billion) over the past two weeks, buying up 300 tons of gold and helping keep prices steady at around $1,468 an ounce.
Putting it all in perspective nicely, blogger Max Keiser notes that while Chinese housewives were out scooping up gold, Americans sold $16.6 billion worth in the first four months of the year. (Read: Gold ETF loses No. 2 spot to emerging markets)
It’s not just housewives in China. The China Daily also reported Thursday that Hong Kong retailers were overwhelmed by all sorts of shoppers from the mainland seeking cheap gold over the three-day May Day holiday, with long lines outside gold shops, blocking streets and sidewalks. That echoes what happened in the wake of that historic gold drop on April 15, with shoppers reportedly swamping jewelry stores across Asia. Writing for the South China Morning Post on April 16, George Chen, whose penname is “Mr Shangkong,” wrote of China’s love affair with the shiny stuff.
“It is traditional for the older generation in China to buy gold products for the younger generation as gifts for various occasions, for example, when their children get married and have babies,” he noted. “Some analysts even joked that this time the war on gold prices may be a war between those big Western institutional investors like leading asset manager George Soros (who earlier in April said gold was no longer a safe haven) and Chinese retail investors, including many local housewives.”
But Chinese buyers are going up against Wall Street and some shaky sentiment for the metal.
Robert Jillies over at Sharps Pixley pointed out Thursday that there are plenty of warning signs for gold. He says upside risks for gold have increased as the price nears key $1,500 and $1,522 support levels. He sees a retest of $1,325 in the next few weeks, and notes that that instrumental rebound in physical demand is showing signs of tapering off.
“Gold remains in a bear market and typically, it will need time to find a strong base before embarking on a recovery,” says Jillies.
As for those Chinese housewives, this blogger was unable to listen to that original radio broadcast, but a few questions do come to mind. What exactly is the definition of “housewife” in China? Is she related to “Mrs Watanabe“, the mythical keeper of Japan’s household savings? What chunk of spending power in China does she represent? In other words, how much of a power shopper can gold prices count on here?
Statistical data from Catalyst showed as of late 2011, 71.1% of women between the ages of 18-64 were employed. So the housewife minority is propping up gold? Hmmm…
Here’s another look at the importance of buying gold in China, from a reader of blogger SilverDoctors who had moved there recently and spoke of the frenzy over the Chinese New Year for the shiny stuff. What has he learned? Chinese mothers don’t want vacuum cleaners for Christmas (Yeah? Join the crowd). They want silver or gold. Minimum $80 worth please.
– Barbara Kollmeyer