On January 23, 2020, China locked down the city of Wuhan, where the novel coronavirus is widely believed to have originated. Eventually, nearly all of the province of Hubei, home to 56 million people, would also be shuttered. China’s economy screeched to a virtual halt, and that included the gold retail market, which had become the fastest growing and most important in the world. Chinese gold demand plummeted 61 percent during the first quarter of 2020, compared to the year-ago period.
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Now, one year later, the gold market is rebounding in China, according to the World Gold Council. Wholesale demand is up, as the nation’s gross domestic product rose 6.5 percent in the fourth quarter. Jewelry manufacturers say they are optimistic 2021 will be a bright year for gold sales.
An important indicator will come on February 12th, the Chinese New Year, which is the most important holiday in China.
Gold is a popular gift for the Chinese New Year. Ornate 24-carat gold jewelry, frequently featuring zodiac symbols, are treasured gifts. Children may receive gold coins from parents and relatives. Along with the red, the color gold is believed to offer good fortune in Chinese culture.
As China has become more affluent, its retail gold market has exploded, with many Chinese believing gold purchases reflect wise financial planning.
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