By Bitcoin.com - 2 months ago - Reading Time: 2 minutes
Affected by the National Stock Market Downturn, Chinese Investors Have Flocked to Gold
Chinese investors have been buying gold as an investment, motivated by the poor performance of traditional stock and property options. According to World Gold Council (WGC) reports, China had the largest demand for gold for jewelry and investment purposes in 2023. This, and the demand from central banks has maintained gold prices over $2,000.
Chinese Investors Flock to Gold
Chinese investors are returning to gold amid one of the worst national stock market routs in the last five years. The nation registered the largest demand for gold for investment and jewelry in 2023, according to the World Gold Council (WGC), helping prices maintain over $2,000 per ounce.
Demand for gold in China for investment purposes rose by over 25%, reaching 280 tonnes last year. In the same way, China required 630 tonnes of gold for jewelry in 2023, 10% more than in 2022.
Experts asserted that, while understated, China’s market behavior was relevant for gold last year. Louise Street, senior markets analyst at WGC, commented:
China was key to a lot of what was happening last year. When you look at the consumer sector, China is not the price-setting factor but it is providing a floor.
While global official gold demand subsided last year compared to the numbers posted in 2022, when incorporating over-the-counter (OTC) and stock flows, it registered all-time high numbers, with customers requiring almost 4,900 tonnes of the precious metal. And in China’s case, this demand shows no sign of diminishing anytime soon, according to Adrian Ash, Bullionvault’s research director.
However, this demand has not been only limited to gold. Reports have also found that Chinese investors have been investing in cryptocurrencies, even though crypto trading has been banned in China since 2021. To sidestep these restrictions, they have been using Hong Kong and their $50,000 foreign currency quota, given that crypto trading is still perfectly legal in the city.
As a consequence, Hong Kong officials are strengthening the regulation of OTC markets “to mitigate the potential risks of virtual assets while providing transparency for the users,” Under Secretary for Financial Services and the Treasury Joseph Chan Ho-lim declared.
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Original source: Bitcoin.com