Remember, India and China are the two largest retail buyers of gold in the world. How much? According to a paper by GMO, China and India accounted for one-third of all global gold purchases between 2000 and 2010.
In other words, while gold might go up on worries about debasement of currency, gold can also trade on other fundamentals — like whether consumers in China will still be able to buy as much if the Chinese economy slows down.
One other point: inflation worries is a major driver of gold, but the OECD noted fairly low inflation of 2.8 percent in the twelve months ending in January.
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