A useful chart from GMO, showing gold demand from Emerging Asia over the past decade. I would comment that here in the West, both gold trading and gold investment demand remain over-focused on quantitative easing, and track more closely the policy decisions of the Federal Reserve. To this point, it bears mentioning that OECD investment demand for gold still remains far, far below historical highs from 30 years ago. But the broader view suggests, in contrast, that reserve-accumulating economies in Asia are the larger drivers of demand, as they must offset their long exposure to OECD currencies. Indeed, according to the GMO chart, emerging Asia has now crossed the 50% threshold as a portion of global demand. This underscores again that the current bull market in gold has few similarities to the previous example, and analysts should use caution when drawing on the experience of the late 1970′s. | see: Emerging Asia’s Share of Global Gold Demand, 1999-2010, from their January 2012 piece titled: Emerging Consumers Drive Gold Prices: Who Knew?
Further Reading: My recent interview with Gold Money