April was a busy month for Guangzhou Hualin International Jewelry Market. Eager buyers flocked to the venue to take part in a new gold rush as prices soared and the precious metal took on new life as an investment vehicle.
The Guangzhou market, originally known for its bustling trade in jade and jewellery, has seen an “influx” of newly opened gold shops, with shop owners saying dozens had popped up earlier this week.
“The number of customers is increasing day by day,” said the shop owner, requesting anonymity. “Sometimes it feels like a crowded wet market.”
The market is in turmoil due to rapid price fluctuations. “From the beginning of this year to now, we have customers who buy gold bars for tens of thousands of yuan or hundreds of thousands of yuan,” he said. “However, current prices are so high that consumers are becoming cautious. Most new customers are purchasing products with lower gram counts.”
Another trader said many traders have started selling stocks.
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Chinese consumers sell old jewelry as gold prices hit record highs
Chinese consumers sell old jewelry as gold prices hit record highs
“Today’s buying price is 554 yuan (US$77) per gram,” the merchant said. “Just now, a woman who got married last year sold me the gifts she received at her wedding, including necklaces, pendants, and bracelets.”
China’s central bank, the People’s Bank of China, purchased 160,000 ounces of bullion in March, bringing its total reserves to 72.74 million ounces. This is the 17th consecutive month of purchases, according to official data, as China seeks to diversify its holdings away from U.S. Treasuries. While the relationship between the two countries is strained.
China has also stepped up its search for additional stockpiles of this valuable material. China News Agency reported on April 7 that a large-scale mineral deposit has been discovered in the Qaidam Basin in northwestern Qinghai province, with a 43.2-ton vein worth more than 20 billion yuan (US$2.8 billion).
Gold prices are at historic highs in markets around the world. In New York, gold futures for June delivery hit an all-time high of $2,384.5 an ounce on Tuesday.
Some owners of gold and its derivatives keep a close eye on the market so they can cash out at any time.
“I started buying paper gold at about 300 yuan per gram and have continued to hold it until now,” said Li Yue, a Guangzhou-based investor. “People started hoarding gold due to lack of access to control their wealth and concerns about excessive money supply.”
Paper gold is a vehicle for investors interested in buying and selling metals based on pre-set contract terms. No physical delivery of the metal itself is required.
“But I’m still a little confused.” [to cash out]”
