By – Mike Fuljenz
The rising U.S. dollar has dampened the gold price and created negative sentiment in the U.S., but gold has not fallen much in most other currencies, and demand continues to rise in most Asian gold markets:
In China, the Shanghai Gold Exchange (SGE) was scheduled to launch next Monday, September 29, but it opened 11 days early, on Thursday, September 18. To supply gold for that exchange, the SGE imported almost $16 billion worth of gold this year, through August 31. Since June, gold imports through Shanghai’s new international airport in Pudong have risen 200%. Now, international financial giants like UBS, Goldman Sachs, JPMorgan Chase and other large banks are trading gold contracts in Shanghai.
In India, gold imports rose 176% in August (vs. August, 2013), partly due to some artificially low import totals in the summer of 2013, right after India established its gold import duties. India only imported $739 billion in August 2013, but they imported over $2 billion in gold in August of 2014, partly due to some compromises by the government, which now allows some Indian banks and traders to buy gold overseas.
Other Asian markets are following China’s lead: Singapore will offer new gold contracts next month. Thailand is also considering setting up a spot gold exchange. The CME Group says it will launch a new gold contract in Hong Kong before the end of this year, and Dubai is also launching a new gold contract. These and other new gold markets in and around Asia should help to lift the gold price by year’s end.