China's Dragon Lunar New Year sets gold buying records
Gold fever swept China during the week-long Lunar New Year holiday with gold bullion and gold jewelry sales exploding since the Year of the Dragon began.
Posted: Monday , 30 Jan 2012
The Year of the Dragon Lunar New Year holiday set a new record for gold buying among the Chinese with the gold buying boom anticipated to last until February 6th.
Data released by China's Ministry of Commerce Saturday said sales of gold, silver and jewelry rose 57.6% at Caibai, one of Beijing's best known gold retailers.
State news agency Xinhua reported that both Caibai and Guohua, another of Beijing's top gold retailers, reached about 600 million yuan (US $95.28 million) in total sales. Beijing's Municipal Commission of Commerce said the week-long holiday produced a 49.7% jump in sales over last year's festival.
Other jewelry stores across China also saw sales boom with customers buying New Year's gold bars, gold ingots and other kinds of dragon-themed jewelry.
China has been encouraging its citizens to buy and hold physical gold either in jewelry or bullion to build financial reserves in assets strong than the U.S. dollar, the euro or other weakening currencies.
"To most Chinese nowadays, gold is more convenient to cash in than other investment instruments," Guan Qiang, assistant manager at Caibai, told Xinhua News. "Despite common investment risks, the price of gold is clear and easy to judge."
"Many Chinese people lost lots of money in property and stock investments in 2011, so they prefer to buy gold to maintain the value of their savings amid high inflation," Liu Yangyi, a trader at the Shanghai Gold Exchange, told the Global Times Saturday.
"Chinese do not value gold only in sentimental terms. The precious metal is also expected to maintain or increase its value, as evidenced by the surging investment demand seen around the country," Guan stressed.
The Shanghai Gold & Jewelry Trade Association expects gold investment to hit 955.2 tonnes by 2020, thanks to demand by a growing middle class and a more affluent society, according to Xinhua.
"Besides, Chinese people have a special feeling toward the dragon, and sales of gold jewelry in the Year of the Dragon are much better than in other years," Liu said, adding the gold sales boom will normally last until the Lantern Festival or February 6 depending on the year.