Shanghai stock crash shot of adrenaline for Chinese gold demand

Shanghai stocks have fallen nearly 30% since mid-June. The equivalent in U.S. terms would be for the DJIA to fall 6000 points to the 11,000 level – a crash by any definition. Most of the commentary on this important subject has centered around the potential contagion effect for stock markets in the rest of Asia and beyond. There is another aspect to the crash worth considering though, and that has to do with the effect it will have on Chinese gold demand. The Chinese people, it is well known, already have a cultural affinity to gold. That attachment just received a shot of adrenaline.