Earlier this month, World Gold Council chief market strategist John Reade said he expects gold to shine in 2018, and one of the primary reasons will be rising income growth in China and India.
A report recently published by the Centre for Economics and Business Research lends support to Reade’s prediction. According to the 2018 World Economic League Table, India will leapfrog France and England in 2018 to become the world’s fifth largest economy in dollar terms. The report also predicted that China will overtake the US as the world’s biggest economy in 2032.
China and India rank as the number one and two gold consuming countries in the world. It stands to reason that strong economic growth and rising income in these Asian nations will boost demand for gold.
According to Reade, China’s income growth is expected to come in at around 6.4% in 2018. And India is expected to be one of the fastest-growing countries in the world next year, expanding at an even faster rate than it did between 2012-2014.
Over the long run, income growth has been the most important driver of gold demand. And we believe the outlook here is encouraging.’
This post was published at Schiffgold on DECEMBER 26, 2017.