Spring Festival sparks a “Gold Rush” in China

A “Gold Rush” swept through China during the week-long Lunar New Year Holiday this year, with demand for precious metals and jewelry rising since the Year of the Dragon began.
Sales of Gold, Silver and jewelry rose 57.6% during the week-long holiday at Caibai, one of Beijing’s best-known Gold retailers, according to data released by the Ministry of Commerce (MOC) Saturday.

Other jewelry stores across the Country also saw sales rise during the period, with customers favoring New Year-themed Gold bars, Gold ingots and other types of Dragon-themed jewelry.

“Long treasured by Chinese, Gold is no longer owned only by a privileged few, but has become a new investment asset open to all,” said Guan Qiang, assistant manager at Caibai.

The Spring Festival gives people a chance to preserve and present Gold as gifts, offering hopes that it will increase in value and not be impacted by inflation.

During the week-long holiday, which lasted from 22-28 January the sales volume in Caibai and Guohua, another of Beijing’s top Gold retailers, reached about 600-M Yuan (about US$95.28-M).

The figure showed a 49.7% increase over that of last year’s Spring Festival, said a report released by the Beijing Municipal Commission of Commerce.

Caibai began selling Gold bars as investment items during the 2008 Beijing Olympic Games, but the trend of buying Gold or Silver bars during the Spring Festival has really taken off in the past 2 yrs there.

The precious metal is also expected to maintain or increase its value, as evidenced by the rising investment demand seen around the Country, analysts said.

To most Chinese, Gold is more convenient than cash in than other investment instruments. Despite common investment risks, the price of Gold is clear and easy to judge.

Compared to unpredictable investments, such as those in the stock market or housing sector, Gold is cherished more by Chinese for its increasing value as an asset as well as the unlikelihood that it will be affected by inflation.

China is expected to overtake India as the World’s # 1 Gold consumer in the next few years. Strong demand for investments in Gold and jewelry will drive China’s total Gold demand to 750 metric tons in Y 2011, according to the World Gold Council.

Despite the record-high price of Gold, the demand for investments in Gold and jewelry has continued to rise, with the market expected to reach about 955.2 metric tons by Y 2020, thanks to a growing middle class and a more affluent society, said Binghai, director of the Shanghai Gold & Jewelry Trade Association.

Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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Posted by Shayne Heffernan on Feb 1st, 2012and filed underBRIC, Gold, Latest News, Metals, Paul Ebeling, USA.You can follow any responses to this entry through theRSS 2.0Responses are currently closed, but you can trackback from your own site.