Chinese Gold update

This 1996 Chinese gold Unicorn - 1 OZ coin, with a purported mintage of 858 pieces sold on ebay last night for $13,600. One year ago it could have been purchased on ebay for about $1800. This is not a fluke, as a half ounce unicorn 1995, MS69 with a mintage of 2000 sold a few days before for $5,700, while a 1995 set with a half ounce and a quarter ounce bi-metallic sold ungraded for $8,100 the week before (already a bargain?).

Jim Chanos has been trumpeting the idea that China is in the midst of a fantastic housing bubble. It's easy to find youtube videos of entire Chinese Ghost Cities, which are still being constructed in order that China meets it GDP targets. Meanwhile, vast swathes of the Chinese public, who can not afford these empty luxury condos, still live in hovels.

So are these prices for Chinese Gold coins sustainable?

The easy knee-jerk answer would be: No, of course not.

Yet, even if the Chinese economy temporarily collapses - along with the rest of the world economy, there are still an enormous number of extremely wealthy Chinese now who need to put their paper money somewhere. And if not into inflated bubble real estate projects, then much if it will still flow into gold. In fact, as we see confidence in all paper investments wane, the we could well see the flow into gold accelerate.