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November 13, 2024
PI Global Investments
Precious Metals

Chinese gold sales looking strong despite high prices as Year of the Dragon approaches


(Kitco News) – As the Chinese New Year fast approaches, gold traders and investors are closely watching sales in the world’s largest precious metals consumer market to gauge the impact of higher prices on recent burgeoning demand. 

Chinese New Year will fall on Saturday, Feb. 10 this year, beginning the year of the Wood Dragon. As a major public holiday, Chinese people will enjoy eight days off work, from Feb. 10 through Feb. 17. 

It’s traditional to buy gold during the Lunar New Year holiday in China, and gold purchases continued to increase last year even as the price of gold hit new all-time highs. 

According to a report from Shanghai broadcaster CGTN, the higher prices have not discouraged buyers in the run-up to this year’s holiday. 

“Consumers who received their year-end bonus will purchase gold as investments or buy jewelry to dress up,” said Chen Mengyi Manager of Jinrong Flagship Store Laomiao Jewelry. “The Year of the Dragon is approaching, some will buy a dragon-shaped pendant to give to newborn babies and the elders in the family.”

The report noted that all signs point to consumer gold sales being very strong this year with the higher gold prices actually creating additional incentive for people to buy, as they see the precious metal as an appreciating asset. 

“Gold price increased last year in RMB term by 16.8 percent, a very attractive return compared with other main stream financial assets,” said Wang Lixin, CEO of World Gold Council China. “On the other hand, it means you need to pay more for gold jewelry. But based on our research, we find young consumers intended to pursue the so-called saving consumption. One hand, they consume, on the other hand, they can have a sense of savings.” 

According to the China Gold Association, gold consumption in the country exceeded 1000 tons in 2023, representing a year-over-year increase of around 9% overall, with sales of gold jewelry up 8% while sales of gold bars and coins rose over 15% during the year.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.



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