The attraction of gold forces Chinese investors to “own” the yellow metal

With the sudden pivot of global banks towards gold, the price of the yellow metal skyrocketed to break its previous records. Gold currently sits at $2,320, with trajectories projecting strong price traction at the center.

The sudden strengthening of gold was mainly due to the world bank’s XAU buying spree. This development played a vital role in increasing the price of gold. But there is much more than what meets the eye.

It seems that China is a pioneer in this area, and not just from the simple vertical political perspective. Gold has become a popular metal in China, and ordinary households rely on it to stabilize their long-term profits and returns.

Also read: Ditch the US stock market and invest in gold in 2024: says analyst

Chinese investors’ obsession with gold: what’s happening?

gold bars wearing a crowngold bars wearing a crown
Image Source: Watcher Guru

The Chinese have recently been banking on the “exquisite yellow metal,” which seems obvious given the country’s soaring gold imports.

China’s gold imports have soared since the start of 2024, due to the equity shortage and real estate market crisis the country is currently grappling with.

According to Wall Street Silver on X, the collapse of the real estate sector, coupled with the erosion of the stock market in China, is now forcing Chinese investors and citizens to hoard gold.

“While the real estate sector has been in crisis for the past few years and Chinese stock markets remain in a bear market, the love for bullion on the mainland has led to incessant buying by households.”

The platform was quick to share its statistics, adding that China has imported nearly 2,800 tonnes of the yellow metal so far, surpassing all records and thresholds previously set in the region. This development further indicates that it is not just banks buying the precious metal in China; the average Chinese household is also capitalizing on gold, allowing its price to reach new highs.

“Over the past two years, overseas purchases totaled more than 2,800 tonnes, more than all the metal that fuels exchange-traded funds worldwide. So it’s not just central banks buying the shiny yellow metal, but also cash-rich Chinese households.”

Will gold undergo further corrections?

Analysts at X predict new price milestones for gold to hit this year. Rashad Hajiyev, a renowned financial analyst, said the precious yellow metal would correct its price slightly ahead of the US session.

Also Read: 3 Reasons Why Gold Is Superior to Other Investments

Hajiyev later explained how miners can also play a crucial role in the yellow metal’s price recovery. According to the analyst, gold could cross the $2,375 mark in the coming months.


reference: watcher.guru

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