| The Chinese economy is showing serious signs of stress, this is resulting in reduced demand for all commodities including gold. China is the worlds top gold consumer, if this country enters recession it will drag gold down with it. This is further support for my assertion that recession and deflation are bearish for gold.
To understand the role of gold in the economy you must understand China. The country is not only the biggest consumer of the precious metal, but the worlds biggest producer as well. The Chinese economy is showing serious signs of stress and its overheated markets show the tell-tale signs of speculative bubbles - slowdown in growth is inevitable...............................................Full Article: Source
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