People across China are buying up gold in large volumes ahead of the Lunar New Year holiday, as surging prices for the precious metal fuel its popularity as both a festive gift and an investment.
From migrant workers splashing out on gold-coated jewellery, to white-collar workers pouring their savings into gold-linked investment funds, the metal is widely seen not only as a marker of social respectability, but also as a safety net amid an uncertain world.
The rising demand comes amid an unprecedented rally in gold prices. Spot gold briefly touched a record high of nearly US$5,600 per ounce in late January, before retreating to about US$5,000. Despite volatility in global markets, it continues to hover near historic highs amid sustained demand ahead of the Lunar New Year. In China, gold jewellery is now selling at major retailers for more than 1,529 yuan (US$221) per gram, up from 890 yuan around Valentine’s Day last year.
The price spike has sparked a surge in sales of gold-plated silver jewellery in Chinese factory hubs such as Dongguan. Gift-giving is a huge part of the Lunar New Year, as millions of migrant workers return to their hometowns laden with boxes of food, cash-filled red envelopes and other presents for their relatives and prospective partners.
And with prices for both gold and silver soaring, gold-plated jewellery is becoming a popular gift: it is more affordable than pure gold items, but is still likely to hold its value, explained Chen Li, a sales assistant at a jewellery shop in Dongguan.
“Inquiries and sales of gold-plated silver items have noticeably increased ahead of the Lunar New Year, mainly from migrant workers at nearby factories,” Chen said, adding that the recent spike in silver prices was likely to fuel the trend even more this year.