Monday, January 30, 2012

Spring Festival sparks a 'gold rush' in China

The China Daily reports a 50% increase in gold sales at stores during Chinese New Year this year.

"People seem crazy about gold, snatching it up more like a 'cheap cabbage' than such a precious metal,"..

BEIJING - A "gold rushswept through China during the week-long Lunar New Year holiday thisyearwith demand for precious metals and jewelry surging since the Year of the Dragon began.
Sales of goldsilver and jewelry rose 57.6 percent during the week-long holiday at Caibaioneof Beijing's best-known gold retailersaccording to data released by the Ministry of Commerce(MOCon Saturday.
Other jewelry stores across the country also saw sales boom during the periodwith customersfavoring New Year-themed gold barsgold ingots and other types of Dragon-themed jewelries.
"Long treasured by Chinesegold is no longer owned only by a privileged fewbut has becomea new investment channel open to all," said Guan Qiangassistant manager at Caibai.
The Spring Festival gives people a chance to preserve and present gold as giftsofferinghopes that it will increase in value and not be impacted by inflationGuan said.
During the week-long holidaywhich lasted from January 22 to 28, the sales volume in Caibaiand Guohuaanother of Beijing's top gold retailersreached about 600 million yuan ($95.28million).
The figure showed a 49.7-percent increase over that of last year's Spring Festivalsaid areport released by the Beijing Municipal Commission of Commerce.
Caibai began selling gold bars as investment items during the 2008 Beijing Olympic Gamesbutthe trend of buying gold or silver bars during the Spring Festival has really taken off in the pasttwo yearsGuan said.
For Guan and his colleaguesthe Spring Festival rush was an exciting but exhaustingexperienceas customers flooded the store and surprised clerks with their purchasing enthusiasm.
"With customers crowding and rushing inwe did not even have time to eat and drink," said asales clerk at the gold bar counter surnamed Li.
She said each shop assistant had received hundreds of customers per day and wrote severaltimes more orders than on ordinary days.
"You can hardly even see the gold barsnecklaces and pendants in the display casePeople seem crazy about goldsnatching it up more like a 'cheap cabbagethan such a preciousmetal," said Beijing resident Miao Miao.
"You have to quickly decide whether to make a purchaseor it will be taken away by others."

Link to full article

Wednesday, January 18, 2012

Chinese Coin Dealers are Quietly Buying Again

Chinese coin dealers were required to prepay for 2012 Panda and Lunar Dragon coins, locking up a big chunk of cash in December. Now that Pandas and Dragons have been delivered and are being sold to the public, their cash situation has improved. Dealer end-of-year liquidations have abated and Chinese dealers are quietly buying again.

Gold is still much in demand in China.  As their cash positions improves, Savvy China dealers will be looking to take advantage of lower prices behind the scenes.  They will not chase prices and bid up auctions just yet, but buy they will...

We feel that Chinese coin prices have largely stabilized and some coins are beginning to recover.  Now that gold is over $1650, China expected to ease rates, and more QE on the horizon to bail out Europe, those looking to pick-up bargains may want to act soon.  

Thursday, January 12, 2012

China Private Gold Savings

The forces behind the Chinese coin market.....


China’s Gold Imports From Hong Kong Climb to Record on Investment Demand
By Bloomberg News 
January 11, 2012 4:50 AM EST
China’s gold imports from Hong Kong surged to a record as consumers bought the metal before the Lunar New Year this month and investors sought to hedge against financial turmoil. Bullion rallied to a four-week high.
Mainland China bought 102,779 kilograms from Hong Kong in November, up from 86,299 kilograms in October, according to the Census and Statistics Department of the Hong Kong government. China doesn’t publish gold trade data.
Demand for gold is climbing in China as investors seek to protect their wealth against slumping property prices and equity markets amid an inflation rate above 4 percent. The nation overtook India in the third quarter as the largest gold jewelry market, according to the World Gold Council. The country is also the biggest producer. Bullion rose as much as 0.9 percent to $1,647.45 an ounce today, the highest since Dec. 13.
China’s appetite for gold is very strong and growing,” said Tao Jinfeng, chief investment consultant at Haitong Futures Co., China’s largest brokerage by registered capital. “The few months before the Lunar New Year is typically the peak demand period for Chinese people.” The weeklong holiday begins Jan. 23.  more...

Wednesday, January 11, 2012

Chinese Central Banker Declares That 'Gold Is The Only Safe Haven Left'

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China is making an even bigger move toward gold in reaction to money printing around the world (via @JamesGRickards).
People's Bank of China official Zhang Jianhua declared yesterday: "No asset is safe now. The only choice to hedge risks is to hold hard currency - gold."
Zhang, the bank's research director, recommended buying the dips: "The Chinese government should not only be cautious of the imported risk caused by rising global inflation, but also further optimize its foreign-exchange portfolio and purchase gold assets when the gold price shows a favorable fluctuation."

Read more: