Chinese Distrust in Economy Spurs Rush to Buy Safe-Haven Asset 'Gold'

Gold Buying Surge Amid Economic Slowdown in China
"Investment in Safe Asset 'Gold' Increased"

As China's economic downturn prolongs, Chinese people are actively purchasing 'gold,' considered a safe asset.

According to Chinese local media Daily Economic News on the 13th, as gold prices have risen this year, consumers are continuing to buy gold in anticipation of further increases.

An employee at a gold store in Zhangjiakou City, Hebei Province, said, "This year has seen the highest number of gold buyers in recent years," adding, "The mentality of buying more as prices rise is at work."

Mr. Li (李), who visited a gold exchange in Beijing, said, "In the long term, gold prices continue to rise," and "Gold is essential for occasions like anniversaries, so I buy whenever I have financial leeway."

Chinese People Sweeping Up Gold... Gold Purchases Up 16% in the First Half

[Image source=Pixabay]

According to the China Gold Association, the amount of gold purchased by Chinese people in the first half of this year was 554.9 tons, a 16.4% increase compared to the same period last year. Among this, gold jewelry accounted for 368.3 tons, up 14.8% year-on-year, while gold bars and coins increased by 30.1% to 146.3 tons. This shows that gold consumption for investment purposes such as gold bars has increased much more than for ceremonial jewelry.

The National Bureau of Statistics of China analyzed, "Precious metals such as gold, silver, and pearls were the items with the highest sales growth among retail goods in China in the first half of the year," adding, "Risk-averse financial investment demand has concentrated on gold, significantly increasing investment in stable physical gold."

As demand for gold rises, gold prices continue to maintain an upward trend. On the morning of this day, the trading price per gram at the Shanghai Gold Exchange was 469.4 yuan (about 86,000 won), up 14.2% from 411 yuan (about 75,000 won) at the beginning of this year. Retail prices for gold jewelry also exceeded 600 yuan (about 109,000 won).

Spread of Safe Asset Preference... Gold Prices Rise

Beijing, China. [Image source=Pixabay]

Earlier in the first half of this year, safety asset preference sentiment spread due to concerns over the insolvency of U.S. banks. As a result, investors flocked to the gold market, causing international gold prices to rise sharply. In particular, due to the depreciation of the yuan, the increase in gold prices within China was greater than the rise in international gold prices.

Mr. L? Chao, General Manager of Guangzhou Tongxin Investment Advisory and a gold investment analyst, predicted, "Once the U.S. Federal Reserve's interest rate hike cycle ends, international gold prices will rise further."

However, another expert said, "Chinese gold prices and international gold prices are naturally linked," adding, "If the U.S. economy worsens, demand for gold investment will strengthen, but if there is a soft landing, the preference for safe assets will subside, and gold prices may weaken."

This content was produced with the assistance of AI translation services.