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Chinese rush to gold as prices drop

12-29-2011 14:12 BJT

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Well, gold has certainly seen a big boost in price versus the same time last year. Prices hit a record high in September of this year following inflationary fears stemming from very accommodative policies across the world. But prices for the precious metal have since retreated for the last quarter of the year. Following the drop in price, many Chinese have rushed to buy gold, especially bullions with a dragon pattern, wishing for a prosperous up-coming Year of the Dragon.

Prices for pure gold in Shanghai has dropped to 420 yuan per gram, a decline of 22 yuan from a week ago, and 52 yuan less from its highest point. Many investors began buying gold bullion for long term investment. However, what’s different this time around, is that dragon patterned gold jewellery and bullions are in special favour, as the year of dragon is coming soon, in less than a month.

One investor said: "I think prices are at a point where it makes sense to invest in gold. In the long term I believe gold price will rise."

Mao Wen, project director of World Gold Council said: "Products released especially for the year of the dragon is getting really popular, even before the Chinese New Year. Many shops are introducing more products with the dragon zodiac pattern."

Accounts opened for T&D (trade & delay) for gold have surged up, representing an increase in non-material gold trading. However, experts warn over trading gold on leverage is risky, and recommended holding real gold in portfolios.

 

Editor:Zhang Rui |Source: CNTV.CN

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