China's Long-term Gold Demand Remains Robust

Commodities remain strong in European session as the euro advances and the US dollar weakens. Gold climbs for a second consecutive day and is currently trading at a 3-day high of 1510.5. As of June 28, gold gained around +5% in 2Q11, significantly underperforming the +12% rally the same period last year. Recall that sovereign crisis in the European periphery sparked in the second quarter in 2010 and this drove investors to seek safe-haven investments. Gold rallied as a result. Failure to repeat the history this time probably indicates investors are more confident that the situation will be contained and they realized the cases for Spain and Italy are fundamentally different from the one in Greece

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China's Long-term Gold Demand Remains Robust