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China and India combined consumption exceeds world’s total mine supply

The latest statistics have revealed that China and India have a combined gold consumption which exceeds the total amount that is currently being mined. The report publishing the statistics was released by Bloomberg Industried Head of Metal and Mining, Ken Hoffman. Combines, the two countries have a combined consumption of 8 million ounces a month. The shockingly high consumption rate persists even in the face of import restrictions in India. The same report calculates that the amount of gold currently being mined and put into market is around 7.5 million ounces, which means that there is a deficit of 0.5 million ounces each month.

 

However, experts have suggested that these figures may underestimate the total amount of gold imported by these countries because of alternative points of import that were unaccountable in an official capacity. Following the Indian elections, it has been announced that the import legislations are to be relaxed which will have the predicted effect of further increasing the Indian demand for gold. This will undoubetely lead to a further increase in the mismatch in supply and demand.

 

The reason for the insatiably large demand for gold in China and India seems to lie with the fact that their attitudes towards gold seems to be fundamentally different to those of other Western countries. The intrinsic attitude towards gold as the ultimate investment of the Chinese and Indians drives their huge demand for gold. They appreciate and are aware of the value of an investment that can protect them from currency debasement and financial instability.