The rise of China, the world's most populous nation, is moving influence and assets from West to East.
And this is having a dramatic effect on the gold market.
China's efforts over the last two decades to modernize and urbanize its economy have created a burgeoning middle and upper class with growing disposable income and net worth.
China has a long-time affinity toward gold. For the past several years, it's consistently been one of the top two gold consumers worldwide. (India holds the title of No. 1 gold consumer – for now.)
China is also the world's largest gold producer. So it stands to reason that China would want to exert more influence over the gold market – and gold prices.
Here's how the Asian nation aims to do just that…
China's Per Capita Gold Consumption Shows Room for Growth
Despite being one of the two largest gold-consuming nations, China still ranks relatively low on a consumption per-capita basis, thanks to its massive population.
China's gold imports have remained strong, with 2014 being the second-best year for Chinese bullion demand. Imports in 2015 have surpassed five-year averages.
Neighboring countries love gold, too. Indonesia, Malaysia, Vietnam, and other emerging markets don't have the benefit of developed financial services. People there look for ways to shelter their savings from inflation.
According to HSBC analysts, many of these buyers turn to gold because they see it as an "efficient and reliable store of value."
Low per-capita consumption of gold in China is regarded as positive. As HSBC sees it, there remains "significant room for growth."
And that bolsters the case for China's desire, and future ability, to dominate the gold market.
According to Anthem Blanchard, CEO of online gold retailer Anthem Vault, "Given that China is the epicenter of the physical gold market, it does make sense that the Chinese government would want its physical Shanghai gold market to supplant the Comex derivative market (and others) as the primary global price-setting mechanism."
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.