The Asian gold rush is engulfing a growing number of investors and may take over from central banks, as global growth uncertainty calls into question the attractiveness of other assets and gold yields are steadily growing.
The price of spot gold rose more than $ 100 in 11 consecutive days and on Tuesday, July 19 set a new record price of $ 1609.51 an ounce. This was the longest period of continuous growth in the price of gold in forty years. This incredible growth was fueled primarily by concerns about U.S. and Eurozone debt delinquency, and investors began buying gold to protect their capital.
India and China, the world’s largest consumers of gold, expect demand for gold to continue to grow until the end of 2011, as the growing prosperity of their populations, as well as high inflation, make gold an attractive investment vehicle.
“Record high gold prices will not scare away investors,” said Shi Heqing, an analyst at state-owned consultancy Antaike in Beijing. “Investors are likely to continue to buy gold despite rising prices, as paper money is increasingly losing its value and people are worried about inflation.”