Gold is increasingly popular among Chinese people as a gift for their loved ones and also as an investment for the future.
In the third quarter of 2011 China overtook India as the world’s largest consumer of gold. This partly reflects the new found wealth that many Chinese people are enjoying, but also shows that many of them are looking to
buy gold and give it as gifts to keep money in the family. Chinese New Year, which passed last weekend, is a particularly busy time for gold retailers, explained the World Gold Council’s Albert Cheng. He said, “People who work in the city go back to their [village or town] for new year.”
He said that they bring, “all kinds of gifts, including clothes and electronics and whatever is not available in the village. And increasingly this includes gold, too.”
This year is the Chinese year of the dragon, which is perhaps the most important year in the Chinese calendar. It is traditional for Chinese people to give gifts of money or jewellery at this time of year, but this year, gold was more popular than before. Another reason for its popularity is, quite simple, its value.
Although buying gold for family members or loved ones may seem like a very generous gift, in a way, it is more of an investment than a gift as
gold prices are rising all the time.
Some of the people swapping their
money for gold last weekend were interviewed by the Financial Times. One buyer, Ms Wang, said, “My grandchild will be born in March or April and I want it to have a gold dragon locket.”
According to the Shopkeeper at one of the stores, the gold bug has really caught on in China, where people seem to be extremely generous with the precious metal – perhaps realising its potential for making cash in the future. Meanwhile, bank managers told the FT that they had sold out of the smallest size gold bar they sell: “Some customers just walk in and buy a bunch of 100g gold bars all at once. A bar of that size costs more than $5,500 at current prices.
“People like to give them away,” she added, “Companies come in too to buy gold bars for presents.”
The fact that gold is increasingly seen as an investment reflects the fact that traditional investments are not as attractive as they used to be. The values of stocks and shares are fluctuating as a result of the ongoing economic crisis, inflation rates are high and interest rates are allow. This all means that other investments and savings options are less attractive than buying up a precious metal and selling gold when the price is right.
The gold price per gram is very high at the moment, following months of price increases, so those who can both buy and sell gold will undoubtedly make some cash. However, those of us who just a few pieces of old, broken gold jewellery lying around can also make money by selling scrap gold jewellery online.
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