The Lunar New Year continues to underpin physical gold sales in China even though prices have soared in recent trades that could weaken physical gold consumption. As a result, the month before Chinese New Year, also known as the Spring Festival, is often the busiest gold buying season in China as more consumers choose to buy gold products. Demand for physical gold picked up this week as it approaches the Lunar New Year prompting many buyers in China and Singapore and several Asian countries, including India and Indonesia. Although there are few Chinese descendants in Indonesia, the number of followers of the tradition is still strong there.
Last year’s pandemic led many to sell their gold deposits in exchange for cash to make ends meet due to high unemployment and a gloomy economy.
“We envision a strong outlook for retail demand over the next few months due to seasonal factors such as the Lunar New Year,” said Ronald, precious metals analyst in Singapore and Jakarta.
Slowly demand has improved. Retail shoppers make purchases for weddings,” said Gunjaran, owner of Gold Shop, a wholesaler in Mumbai.
Indians and Chinese people love gold as an investment necessity and a tradition in their families for hundreds of years. Some even make gold a key requirement in spending their money.
Some countries in the west may not be so, but low borrowing rates over the years will force people to come to gold investment sooner or later.
The Fed’s central bank has promised to hold interest rates on hold for a very long time, and that is also true in European countries. All this will join in the gold. And in the end, gold will hit a record high this year, probably above $2000 an ounce.