Gold as an investment asset will likely glitter brightly in China this year, and its consumption in the form of jewelry may enjoy a short-term boom in the Chinese lunar Year of the Pig, China Daily reported Monday.
China remained the world's largest investment market for gold bars and coins last year, according to a World Gold Council report cited by the newspaper. The report showed demand for gold bars and coins in China stayed robust at 304 metric tons last year.
The People's Bank of China also announced it added roughly 10 tons to its gold reserves in December, the first time since 2016 that it made such a move.
"Physical gold investment demand, demand for gold jewelry, and an increase in gold reserves by the PBOC were the three highlights of the Chinese gold market in 2018," said Wang Lixin, managing director of the WGC. "This re-emphasizes gold's unique role as a risk hedge within investment portfolios."
Song Xin, chairman of the China Gold Association, said there has been an uptrend in gold demand for investment purposes to avoid risks elsewhere. "More and more investors and individuals prefer to hold gold, leading to the dramatic increase in demand for gold bars."
Wang said the complicated business environment may continue to worry consumers and weaken their intent to buy gold for pure consumption in the future.
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