China’s 2024 Gold Rush

As property prices collapse and stocks traded on the Shanghai Stock Exchange continue sinking, the Chinese are continuing their rush into gold. Wholesale gold demand hit a record for January as retailers scrambled to replenish their stocks to meet strong demand from buyers of Chinese Lunar New Year presents. Purchases of gold jewelry were brisk in advance of the February 10 holiday, even though the price of gold was trading near a record high, an indication not only of the Chinese reverence for gold, but also a widespread conviction that gold is the best way to preserve wealth.

“The lack of alternatives, and the fact that it’s become a lot more difficult than it was a few years ago to get your money out of China and invest elsewhere - I think that’s definitely helping gold,” Nikos Kavalis, managing director at consultancy Metals Focus told Bloomberg News.

Many Chinese have lost faith in owning property and stocks, expecting those assets will keep dropping. Gold is seen as a much more conservative, relatively safe asset.

In addition to aggressive buying of gold jewelry, bars, and coins, the Chinese are shoveling money into gold-backed exchange traded funds, which now have a record amount of assets under management.