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Having said that, Metals Focus consultants are also seeing “sizeable headwinds” for consumer gold purchases in the country, including China’s “challenging economic conditions,” the gold price being “historically high,” and jewellery’s appeal facing competition from travel, experiences, dining out and other activities.
Savant said that they've seen strong demand in China for a large part of 2023, and it has continued into the early part of this year. “We think that's really being reflected in the U.S. dollar price of gold, which has held up pretty well despite some readjustments in the market with regards to when the Fed might start cutting rates,” he said. “We think one of the reasons why gold has been able to hold up that well is this demand in China.
He said the Chinese New Year provides an opportunity to double up on gold purchases that investment-conscious citizens would already be doing. “You buy it with the purpose of celebrating a festival, but you're also buying it as a safe haven asset,” he said. “You see this sort of thing happening in China during the Lunar New Year, and you see a similar thing happening in India during Diwali. So it doubles up as both a celebration as well as an investment. You do see a lot of that happening.