Gold Demand in China Anticipated to Soar for Chinese New Year
With the Chinese New Year approaching, gold traders and investors await the consumer purchases in China, the world’s biggest market for precious metals. Last year’s high gold prices did not deter purchases, and this year, with unique factors influencing gold sales, similar results are expected. This year also marks the year of the Wood Dragon, known to boost jewelry demand.
Factors Affecting Gold Jewelry Sales in China
Metals Focus, a China-based precious metals firm, foresees increased jewelry demand for gold due to favorable fashion trends and a growing interest in gold among young consumers. However, economic headwinds and high gold prices might decrease consumer enthusiasm for gold purchases this year.
Impact of Unique Factors on CNY Purchases
Despite high gold prices, more purchasing avenues, and the pandemic’s aftereffects shaping the celebrations, significant gold sales are predicted. CPM Group’s Rohit Savant is optimistic about gold sales, suggesting an increase in demand due to the reduced influence of COVID on the celebrations.
Factors Influencing Gold Demand in China
China’s demand for gold influences its global value, contributing to the high premium between Shanghai Gold Exchange and London Bullion Market Association prices. Gold’s role as an alternative investment, amid a downturn in Chinese equity and real estate markets, also bolsters demand. Robust demand from fabricators indicates strong market demand.
Global Gold Market and China’s Gold Reserves
The People’s Bank of China (PBOC) slightly reduced its gold acquisitions in January 2024, although it continues to significantly impact the global gold market. The PBOC added 10 tonnes of gold to its reserves in January, marking the 15th straight month of growth. Despite the reduced pace of acquisitions, the PBOC is expected to expand its gold reserves to align with other leading economies.
Impact of Chinese Central Bank on Gold Market
China continues to increase its gold reserves as part of its diversification strategy. With China’s gold reserves making up only 4% of its total reserves, there is potential for significant growth to align with other leading economies. A recent surge in physical gold demand and an increase in gold purchases ahead of CNY indicate strong demand for gold in China.
By
By
By
By