Don't Bet on Asian Middle Class to Lift Gold, China Pioneer Says
- Physical demand not seen as likely to spur bullion price
- Rising wealth in China and India forecast to boost demand
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Gold bulls argue that the growing middle classes in China and India will boost demand as richer consumers covet more rings and pendants. Australia’s second-biggest producer cautions investors against getting too carried away by these forecasts.
“I just don’t think it’s a demand equation that’ll make a big impact,” Jake Klein, executive chairman of Evolution Mining Ltd. said Wednesday at the Bloomberg Summit in Sydney. He previously ran a producer that became the first foreign company to operate a gold mine in China. “Yes there’ll be increased physical demand, but the gold market is so dominated by financial issues, inflation and the U.S. dollar, that it’s not going to make a huge difference.”