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Warren Buffet may not like gold that much, but apparently Indians and Chinese haven’t received his latest newsletter. And not only that, China is set to overtake India as the world’s largest consumer of gold. Chinese demand has more than tripled from 2010.
Given that both growth and inflation remain high in China, it appears that gold is being seen as a hedge against inflation. Also, Beijing has encouraged gold consumption, announcing in 2010 measures to promote and regulate the local gold market, including expanding the number of banks allowed to import bullion.
After completely dominating the copper market (China accounts for 40% of global copper demand), it appears that China is about to wade into the bullion shop.
Investors looking to get exposure to gold via ETFs can look towards GOLDBEES or KOTAKGOLD.
Source: FT
