Editor’s Note
As traditional investments falter, individual investors in China are increasingly turning to gold and silver, viewing precious metals as a stable safe haven. This shift highlights broader economic uncertainties and changing strategies for wealth preservation.
China’s precious metals market is heating up with active participation from individual investors. Across China, precious metals markets are filled with people looking to purchase gold bracelets, necklaces, rings, and more. These individual investors, disappointed by the downturn in the real estate market and the volatility of the stock market, are choosing gold and silver as stable alternatives.
According to the World Gold Council, Chinese investors purchased approximately 432 tons of gold bars and coins last year alone. This represents a 28% increase from the previous year and accounts for a significant portion of global gold bar and coin purchases. China’s housing market is experiencing a downturn, and the stock market is also showing high volatility. Additionally, with low bank interest rates, physical assets like gold are considered stable investment alternatives.
On China’s smartphone-based trading platforms, various precious metal investment products, such as gold exchange-traded funds (ETFs), can be easily traded. Inflows into gold ETFs hit a record high last year, and gold futures trading on the Shanghai Futures Exchange also reached its highest level. Furthermore, gold and silver are trading at a premium above international benchmark prices.
Recently, gold and silver prices showed an upward trend in the global market. This is because central banks in various countries are expanding their purchases, and with expectations of a weaker US dollar, gold and silver are attracting attention as attractive hedging tools. Over the past year, international gold and silver prices rose by more than 60% and 150%, respectively.
However, at the end of last month, when US President Donald Trump nominated former Fed Governor Kevin Warsh as the next Federal Reserve Chairman, the dollar strengthened, causing gold and silver markets to plummet. As a result, gold prices fell 9% in a single day, and silver prices plunged 26.4%. Amid this situation, some Chinese banks have reduced loan limits for purchasing precious metals.
On Chinese social media, the term “leek cutting,” which expresses individual investor losses, is trending. In Beijing’s large precious metals markets, a wait-and-see attitude is reportedly dominant among customers. Meanwhile, a tourist from Henan Province expressed disappointment with the current situation where gold prices have risen excessively, stating he had realized profits and was still considering silver as his next investment target.