Chinese consumers line up to invest in gold as prices rise
Updated 18:25, 05-Jul-2019
CGTN Global Business
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01:16

Gold, as a hedging investment, has gained more attention from investors in 2019, amid growing uncertainty over the international economic outlook.

Gold prices have been rising continuously since May. Experts say the gold market usually becomes hotter when prices go up. According to CNBC, the gold price has rallied by more than 11 percent this year, nearing a six-year high.

At a gold sales counter in a shopping mall in southern China's Shenzhen, staff told CGTN that the number of people coming to the store has increased significantly in recent days.

Each morning, wholesalers from all over the country gather in the Shenzhen Shuibei gold wholesale market, bringing a tray with them to pick products. The wholesale market weighs gold not in the unit of grams, as it would for regular consumers, but also by kilograms.

He Fangwei from east China's Anhui Province owns four gold shops. He comes to Shenzhen every month to make purchases. But recently he's been adjusting his selection, as more of his customers are now asking about increasingly heavier quantities of gold jewelry. He says that's probably because of the recent price surges.

VCG Photo

VCG Photo

"These weigh more than 60 grams, and these are more than 50 grams. We didn't sell much of such goods in the past, but recently some people have asked about it, so we've got more," said He.

There are others who choose to sell their own jewelry at a high price. Gold recycling businesses at retailers are also growing as a result.

"Recently in the jewelry industry, the recycling of used jewelry materials, as well as the purchase of old gold bars has become a larger business," said Lu Yihui, a raw gold material manufacturer.

But there are other voices expressing concern over whether the rally will continue in the second half of this year. Experts have said gold is not a very good investment choice in the long term.

"History has proved that it [the gold prices] is much worse than [investing in] good equities. Take an example, from 2008 to now, the gold price rose by about 100 percent, while the overall return for all A-share companies, the average return is 200 percent, and China's first-class mutual funds can provide you with a 400 percent return," according to Chen Jiahe, chief strategist at Cinda Securities.