Chinese rush for gold sparked by uncertainties in US and at home
Chinese buyers with nowhere else to look snap up gold bars in search for ‘reliable value-preserving asset’
Even though gold prices are at record highs, Chinese consumers and retail investors are still buying the precious metal, spurred on by the uncertainty surrounding China’s economic outlook and next week’s US presidential election.
A couple of weeks ago, Wendy He, the director of administration for a private company in Guangzhou, bought gold bullion worth 200,000 yuan (US$28,026) through online banking, which gives her the option to convert it to cash at any time.
“If [Donald] Trump wins, uncertainty over China’s exports and the yuan exchange rate will be set to soar,” she said.
“Inflation in the United States is also full of uncertainty, although interest rate cuts have started.
“Besides, the effect of China’s fiscal stimulus policy is uncertain, and it has affected my expectations for the stability of the yuan exchange rate.
In short, gold is, so far, the most reliable value-preserving asset for ordinary Chinese investors like me.”
