The Chinese and British governments see gold very differently. Could you ever imagine HM Treasury taking out an ad during The X-Factor, encouraging Brits to invest in precious metals?
Well, that’s exactly what the Chinese government has been doing since 2009 on CCTV, its national broadcaster. The cultural significance of gold in China can’t be understated. It is the traditional gift given after a baby is born, on wedding days, on birthdays and at Chinese New Year. Gold is the symbol of wealth in China.And those TV ads seem to be working. Demand for gold from ordinary Chinese citizens is going through the roof. I want to show why this is the most important trend in precious metals investing today.
So by 2020, the Chinese middle class is forecast to be roughly three times that of the US.
And there aren’t many places for these people to put their money. According to the World Gold Council, Chinese households have around $7.5trn in bank accounts in cash. These households also have a relatively modest $300bn in gold.
In fact, there is very compelling evidence that suggests the Chinese middle class has already begun converting their cash to gold.
