“Chinese gold and silver demand has been phenomenal ahead of the New Year holiday,”
said Adrian Ash, head of research at BullionVault.com, a leading online service for gold bullion trading and ownership, citing comments from dealers among others.
Shipments have been “heavy” and they began very early, in mid-December, he said.
This is an excerpt from an article by Myra P. Saefong, of MarketWatch in
San Fransisco (MarketWatch) — Gold prices have lost around $75 an ounce this year but analysts are unfazed by the drop, with many betting the slump in prices will soon be cut short as the Chinese New Year feeds an increase in global demand that’s destined to last.
“We are entering a period of strong seasonal growth in gold demand and Chinese New Year is a big part of that,”
said Brien Lundin, editor of Gold Newsletter. “Physical demand has been supporting the gold prices on the downside even during the typical slack periods, and I expect that upcoming increase in demand will also support the price, but at higher levels.”
The Chinese New Year, also known as Lunar New Year, begins on Feb. 3 this year and ends with the Lantern Festival 15 days later.
“Chinese New Year is the time of year when the Chinese share gifts, usually money in little red envelopes,” said Mark Leibovit, chief market strategist for VRTrader.com. “Perhaps the little red envelopes will be a bit heavier this year.”
But the recent spike in China’s demand for gold goes well beyond providing gifts to celebrate the new year.
“It’s really simple,” said Cary Pinkowski, chief executive officer of Astur Gold,
“China banned gold ownership for most of the 20th century and that’s over. China has a savings rate of more than 30% … [and] has an official inflation rate of 10%.”
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