Chinese consumers rush to buy gold, as prices keep rising
Wed Feb 12 2025
Chinese consumers are rushing to buy gold, as gold prices continue to hit new record highs due reportedly to growing uncertainty in the global economy posed by the US' dramatic trade policy changes.
"I regret not having bought the gold bracelet that was on my list before the Spring Festival. The price is about 1,000 yuan ($136.9) higher now", a Beijing resident surnamed Qian told the Global Times on Tuesday, while shopping at a Chow Sang Sang store on Wangfujing street, one of the Chinese capital's busiest shopping areas.
Qian said that she rushed to buy gold products after seeing the continuously rising gold prices. "Buying gold can be a good investment," she said.
Gold prices hit a record high on Tuesday with spot gold hitting a peak of $2,942.70 per ounce in Asian trading hours, Reuters reported. Reuters attributed the price surge to "safe-haven demand as US President Donald Trump's new tariffs on steel and aluminum imports heightened concerns about a possible global trade war."
In addition, following the recent weakening of US economic data, there has been a sharp rise in risk aversion in the market, which greatly boosted demand for gold, according to some reports.
"We have raised our gold forecasts to $3,000 per ounce over the next 12 months, up from $2,850 previously," UBS Chief Investment Office said in a report released on Monday.
There has been fresh evidence that demand from central banks has been stronger than previously thought, as officials in many parts of the world seek to diversify reserves away from the US dollar. Geopolitical uncertainty should continue to underpin gold's appeal, read the report.
According to the World Gold Council (WGC), central banks around the world continued to buy gold at a strong pace in 2024, with purchases exceeding 1,000 tons for the third year in a row.
"In 2025, we expect central banks to remain in the driving seat and gold ETF investors to join the fray, especially if we see lower, albeit volatile interest rates," Louise Street, senior markets analyst at the WGC, said in a release published on February 5.
As of the end of January, the Chinese central bank's gold reserves stood at 73.45 million ounces, up 160,000 ounces from December, and the central bank had increased its gold holdings for three consecutive months, according to statistics from the State Administration of Foreign Exchange.
Meanwhile, Chinese consumers' enthusiasm for gold continues to rise.
A Beijing-based white-collar worker surnamed Xiong told the Global Times on Tuesday that she planned to get gold accessories from Laopu Gold, a trendy jewelry store at SKP, one of the most upscale malls in Beijing.
During her visit to the store over the weekend, the queue extended from the counter to the front gate of the mall, and other sales associates told her that consumers had been lining up to purchase gold jewelry from Laopu Gold for days.
Apart from gold jewelry, gold bars, and coins, which have more prominent hedging and value-preserving properties, also experienced hot sales recently, especially during the Spring Festival holidays.
Physical gold bars have been out of stock since before the Spring Festival holidays at a state-owned bank outlet in Beijing, the 21st Century Business Herald reported, citing an account manager at the bank.
The high demand for gold among Chinese consumers also highlighted China's vibrant consumption market thanks to various policies to boost consumption, Pan Helin, a member of the Expert Committee for the Information and Communication Economy under the Ministry of Industry and Information Technology, told the Global Times.
Source: http://en.people.cn/