LONDON, June 30, 2011 /PRNewswire/ --
The World Gold Council recently released a new report, which saw China overtake India as the largest purchaser of gold in the world. Spread betting and CFD trading provider City Index (http://www.cityindex.co.uk/) takes a look at a few possible reasons for the Chinese gold drive, and what this means for your spread betting strategy.
Gold gifting is a significant part of Chinese culture, having been associated with good luck and emperor status since ancient times. Birthdays, weddings and New Year celebrations are all still occasions upon which gold is typically bestowed or exchanged, and this tradition contributes to the country's gold demand.
The World Gold Council believes a rise in the disposable income of the Chinese middle class also has a part to play in demand. This increase is likely a result of economic acceleration due to the reforms taking root in China. In 2005, just 15 million households in China had an annual income of more than $4300 per annum.
A global year-on-year increase of 11% in Q1 gold consumption is attributed by the World Gold Council to investment demand. With persistent high inflation levels in China, investors may view gold as an effective hedging tool.
To learn how to spread bet and CFD trade on gold, and to see the other commodities offered by City Index, visit: http://www.cityindex.co.uk/range-of-markets/
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for difference ( CFDs) and, in the UK, financial spread betting.
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SOURCE City Index