Young Chinese Join Gold Buying Frenzy to Ring in the New Year

Various gold jewelry at a jewelry shop in Hefei city in eastern China's Anhui Province on Nov. 10, 2009. STR/AFP/Getty Images

During the Chinese New Year holiday, China saw a significant surge in gold purchases, with young consumers notably joining the buying spree.

Finance experts say gold is increasingly viewed as a stable investment amid uncertain times and economic challenges in China. This trend aligns with the Chinese adage, “Antiques in times of prosperity, gold in times of chaos.”

Leading up to the Lunar New Year celebrations, there was a noticeable uptick in gold buying among the mainland Chinese. Previously, the primary buyers were typically “Chinese aunties,” but now, reports suggest that young people are becoming the main purchasers of the precious metal.

Chinese media reports highlighted sell-outs and stock shortages in gold stores across Beijing, Shanghai, Shandong, and Northwest China. In particular, gold bars and ornaments themed around the Year of the Dragon became highly coveted, with young buyers favoring gold jewelry with innovative designs and smaller weights.

According to Chinese state media, this “gold fever” has persisted since the end of January, with some retailers servicing dozens of customer groups each morning. The clientele spans generations, from middle-aged to those born after 1990. Notably, a prominent Shanghai gold store reported daily sales exceeding 1,000 bars, and a client bought more than 200,000 yuan (about $28,000) of gold jewelry in one go.

Online gold sales have also seen a significant uptick, with dragon-themed jewelry searches and sales soaring by over 500 percent and 400 percent year-on-year, respectively, since January.

Mr. Li, an owner of a gold jewelry manufacturing business in Guangzhou city, told the Chinese edition of The Epoch Times that his factory, with 30 plus employees, has been working overtime to meet the demand, processing hundreds of custom gold jewelry pieces daily ahead of the New Year.

Young People Invest in Gold

China’s gold consumption in 2023 reached 1,089.69 tons, an 8.78 percent increase from the previous year, according to the China Gold Association. This surge in gold investment, particularly in bars and coins, reflects a growing interest in tangible assets amid economic instability.

Zhao Mingyu, an investor and finance-savvy fiction writer from Anhui Province, has shifted his focus from the stock market to gold due to its resilience against inflation and economic downturns. He advocates investing half of one’s assets in gold, given the uncertain global landscape.

Mr. Zhao told The Epoch Times that China’s stock market performance has made him realize the corruption in the finance sector. Consequently, last October, he sold his stocks right before the Shanghai Composite Index fell below the critical 3,000-point benchmark, avoiding the subsequent market crash.

He said that investing in gold gives him peace of mind “because the price of gold follows the international market and gold is the world’s common currency.”

Mr. Li noted that due to the downturn in China’s real estate sector, declining stocks, and heightened investment risks, young individuals are turning to gold as a means to safeguard the value of their assets. He recommended purchasing gold bullion, citing its reliance on international gold price fluctuations rather than personal pricing.

China’s Gold Holding at Historic High

Despite China lifting its zero-COVID measures, 2023 has been marked by significant challenges, including a major downturn in the real estate market, the withdrawal of foreign capital, high unemployment among the youth, and a series of defaults in the financial sector, among other issues. 

Market observers believe Beijing’s ongoing stimulus measures have proven ineffective in supporting the economy, resulting in declining consumer confidence. Earlier this month, China’s stock market China’s major stock indexes reportedly fell across the board, with the largest SSE Composite Index dropping more than 3 percent, falling below the 2,700-point mark and hitting a record low since March 2020.

Despite the economic downturn, China’s central bank holds record amounts of gold.

According to the Gold Demand Trends Full Year 2023 report released by the World Gold Council on Jan. 31, total gold demand in 2023 reached 4,899 tons, the highest ever. Central bank purchases exceeded 1,037 tons, second only to 1,082 tons in 2022 and the second-highest figure since 1950. The Central Bank of China bought more than 225 tons of gold, the highest level since the statistics began in 1977.

Lu Yuanxing, a political and economic analyst, believes that the current global landscape is characterized by instability, highlighted by several geopolitical tensions such as the Russian–Ukraine war, the Israel–Hamas conflict, and the potential for a China–Taiwan conflict. He said these factors have significantly fueled the global demand for gold, pushing it to a high level last year.

“China’s situation exemplifies this trend even more starkly,” he added. “The country’s economy faced considerable turmoil, with nearly all sectors experiencing a downturn. Key industries such as real estate and the stock market suffered substantial declines. Consequently, this led to a pronounced shift in investment preferences toward gold, resulting in a noticeable increase in its market demand.”