One megatrend continues on its path, unperturbed, with no end in sight: The East's huge push for investing in gold.
This was discussed in a recent Money Morning article on the "Love Trade" in gold by guest writer Frank Holmes of U.S. Global Investors.
Wall Street, never enamored with investing in gold in the first place, still leads the charge to sell the precious metal at every opportunity.
Meanwhile, Asians – led by India and China – pick up as much of the shiny metal as they can every time the price is pushed lower by Wall Street selling.
Just look at what happened when gold prices hit a two-year low in mid-April thanks to huge short sales in the futures market. This set off a buying frenzy in Asia for gold, according to the World Gold Council (WGC).
The WGC says Asian gold demand in the current second quarter is expected to hit a record high. The Council expects Indian gold imports to be between 350 and 400 tons in the quarter, up 200% from a year earlier and nearly half of 2012's total gold imports!
Its managing director, Marcus Grubb, said net imports of gold into China in April alone were around 160-170 tons. Demand has continued apace since then, so the WGC believes demand could reach 880 tons this in China.
Why Investing in Gold is a Favorite Choice for China, India
Demand for gold in China and India was already growing, even before the mid-April selloff.
In the first quarter, the WGC reports that Chinese gold coin and bar demand hit a record of 109.5 tons (up 22%) and jewelry consumption jumped to 185 tons. The five-year average for gold investment demand (bars and coins) had been only 43.8 tons, so clearly demand has hit another gear as people become wealthier in China.
Overall, China's gold demand in the first quarter (before the steep price selloff) jumped by 20% to a record high of 294.3 tons.
Obviously, that record will be shattered in this quarter…