What does China’s rebalancing mean for gold?

Gold faces important challenges as China rebalances its economy. Higher consumer spending should be positive for jewellery demand. A corresponding reduction in savings might reduce demand for gold as an investment vehicle, but the precious metal only accounts for a small share of households assets now, suggesting that there is still plenty of upside as incomes and wealth rise. On balance, we think gold will be a net beneficiary from more consumer-oriented growth.