Gold, historically seen as a safe-haven investment and store of value, has regained its appeal in recent years as global economic volatility has increased. In 2024, the price of gold has risen unprecedentedly, setting off a global gold boom.
As the world's largest economy, the United States has made an astonishing profit from its huge gold reserves, which has earned nearly $1 trillion according to statistics, while China, which is also facing economic challenges, has a relatively limited impact on gold's rise.
First, the huge gold reserves of the United States have made obvious profits
As the world's gold pricing powerhouse, the US has second only Germany in gold reserves at 8,134 tonnes. In 2024, the global economic uncertainty will increase, and funds will flow to gold, a "safe-haven asset", pushing up prices. This move not only strengthened the international status of the dollar, but also allowed the US treasury to usher in a huge return.
Specifically, in the first half of 2024, the daily trading volume of the New York Gold Exchange increased by 30% year-on-year, and the US gold reserves increased by nearly $300 billion in this phase alone.
Gold trading institutions, hedge funds, and large investors in these regions have locked in significant profits by actively participating in the gold market. In addition, the holding of U.S. gold reserves also plays an important role in macroeconomic regulation and control, and plays a stabilizing role in the turbulent period of financial markets.
Second, the different structure of China's gold demand affects the profit margin
Unlike the United States, which focuses on financial investment, China's demand for gold mainly comes from personal consumption as a store of value and jewelry. In 2024, gold consumption in mainland China will increase by 15% year-on-year, and the retail market is booming everywhere. Although rising prices stimulate the market, there is no direct link to earning the difference through reserves, as in the United States.
Mainland gold import restrictions also affected profits. As one of the world's largest producers and consumers, China has a large amount of domestic gold production capacity to meet the needs of jewelry and other industries. The impact of the surge in international gold prices on the mainland has been relatively limited.
3. Netizens are hotly discussed
Netizens said: When the eldest daughter got married, the gold price was 370, the grandson was born at 470, the son was married at 530, the granddaughter was born at 570, and the youngest daughter planned to get married at the end of this year, and today the gold price is 730, and I dare not imagine the gold price at the end of the year.
Netizens said: Countries exchange dollars for gold, and the United States sells gold for dollars, and the dollar returns more.
Netizens said: The global gold price has risen, and the beautiful country has bought a large number of them. People sell gold at a high price. Then there will be a wave of depreciation of goods in the countries targeted by the global harvest, and the depreciation of goods in the hands of the people.
Netizens said: The United States is making a lot of money, not owing tens of trillions of debts, but also asking China to continue to buy US bonds.
Netizens said: China must have lost money, gold is rising, that is, harvesting! China's gold is also pulling businessmen, constantly importing from foreign countries, to meet consumers, China does not import gold, will not be cut meat! Let foreigners consume by themselves!
Fourth, write at the end
The economic structure determines that the gold industry chain is different. As a developed country, the financial industry occupies an important position in the United States. Its large gold reserves have helped lock in speculative profits, and the scale of the economy has amplified this effect. China is in a transition phase, with heavy industry and consumption still the backbone of the economy. Domestic gold consumption has become large-scale, and restrictions on gold imports limit the channels for profiting from price fluctuations.
To sum up, the price of gold will rise in 2024, and the United States will achieve nearly $1 trillion in benefits through a sound financial system, while China's impact will be relatively limited due to its different structure and demand. However, with the deepening of the financial industry, there will be more opportunities for China to participate in international gold price fluctuations in the future.
In addition, the two sides may find new points of cooperation in the fields of science and technology and low-carbon transition. For example, we will deepen cooperation in metal materials and new energy applications, go beyond the traditional trade competition model, and work together to address global challenges. It is only through multi-sector cooperation that the two countries can work together to maximize their economic potential.
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