With news that mainland Chinese gold imports hit a record high in November, The Wall Street Journal reports that Chinese demand for gold has propped up global prices as consumers and investors alike stock up on the precious metal ahead of the Lunar New Year holiday:
China’s consumption of gold jewelry jumped 16% last year to a record 514 metric tons, according to metals consultancy GFMS. Meanwhile, India, the world’s largest gold consumer, saw jewelry demand slip.
As in other parts of the world, the Chinese are increasingly blurring the lines between retail gold demand, which is usually thought of as people purchasing jewelry to wear, and investment demand in the form of bars, coins or shares in exchange-traded funds.
Ma Bowen, a sales manager at a gold store in Yu Garden, a shopping area brimming with gold merchants near the eponymous park, estimates he sold 20% to 30% more gold last year. Alluding to worries about inflation, he says he is seeing an influx of younger shoppers among the crowds that throng gold shops steps away from a lavishly landscaped territory with pavilions, ponds and rock gardens.
Many of those shoppers are buying gold bars “to get their hands on something that’s physically valuable and may appreciate in the long run,” he said.