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With the fluctuation of the international market, the price of gold has been rising, and the domestic jewelry gold price is approaching 720 yuan per gram. However, rising prices have not dampened the enthusiasm of buyers, on the contrary, some customers believe that gold is a wealth of preservation and inheritance, and choose to "buy more and more".
According to media reports, the number of customers who come to the mall to buy 100 grams of gold bars and gold jewelry at a time has skyrocketed. On April 5, 700 grams of investment gold bars were sold at the China Gold Coin Counter, with a turnover of nearly 400,000 yuan.
Wang Lixin, CEO of the World Gold Council in China, said that gold is an important part of asset allocation for both institutional investors and individuals. However, the price of investment products must fluctuate, and there are also risks in the gold market.
Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, believes that for ordinary people, investing in physical yellow (such as gold bars and gold coins) is usually a safer choice, because their value is relatively stable, and they are easy to store and inherit. Gold jewellery may not be the best investment option due to processing fees and brand premiums. Even if the price of gold is rising, investors should remain rational, do not covet huge profits, and buy cautiously to protect their own property.
Gold tends to perform well in times of financial crisis and economic turmoil because it is seen as a safe-haven asset that preserves or even appreciates its value. Second, gold is scarce and non-renewable, so its value will increase in the long run as supply decreases. In addition, gold is also a tool against inflation, as its value is not affected by currency depreciation and is able to maintain relatively stable purchasing power.
-- The consumer demand for gold coins and bars is growing rapidly
In terms of investment demand for gold, consumer demand in mainland China increased first and then decreased from 2019 to 2022. In 2021, Chinese consumption of gold coins and bars reached 312.86 tonnes, close to the highest level in recent years. However, in 2022, the total demand for gold coins and bars fell to 258.94t due to factors such as the continued rise in the domestic gold price and exchange rate fluctuations.
However, in the first three quarters of 2023, the high volatility of gold prices led to an increase in interest in physical gold investment, with bar and coin consumption reaching 222.37t, up 15.98% year-on-year, showing a rapid growth trend.
-- Shandong has the largest number of enterprises in the gold industry chain
From the perspective of the regional distribution of representative enterprises in the gold industry chain, the distribution of gold industry chain enterprises in Shandong and Beijing is relatively perfect, and the number of enterprises is relatively large. Among them, Shandong has Shandong Gold, Hengbang shares and other leading enterprises, Beijing has CICC Gold and other enterprises.
-- Shandong's gold mines account for half of the top 10 gold mines
Shandong is the province with the largest gold reserves and production in mainland China, and the gold mines in Shandong Province also account for half of the top ten mines in mainland China, including Jiaojia Gold Mine, Sanshan Island Gold Mine, Xincheng Gold Mine, Linglong Gold Mine and Dayingezhuang Gold Mine. From the company's point of view, the main mines are located in Shandong Gold and Zhaojin Mining, and its gold mines also occupy an important position among the top ten gold mines.
According to a research report by Caixin Securities, the Federal Reserve may cut interest rates soon, the dollar index is in a state of low volatility, and the real yield on 10-year US Treasury bonds is also falling. With long-term inflation expectations relatively stable, real yields on US Treasuries have limited room for future upside. Coupled with high inflation levels in the economies of the world's major developed countries, gold prices are expected to continue to rise.
David Rosenberg, a top economist in the United States and president of Rosenberg Research, believes that the upward trend in gold is not over yet. He predicts that the price of gold could rise to $3,000 before the next business cycle shifts, up 30% from current levels.
Note: This article is for content purposes only and does not constitute any investment advice.
Prospective Economist APP Information Group
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