Gold purchases surge in China as prices slump in run-up to Spring Festival

• Peng Wei-lin and Staff Reporter
• 2014-01-03
• 13:13 (GMT+8)

Customers buy gold jewelry in a store in Nanjing, capital of eastern China's Jiangsu province, April 18, 2013. (Photo/Xinhua)

Many shops selling gold in Beijing are catering to a steady stream of customers interested in buying the precious metal after gold prices started decreasing.

International gold prices were at US$1,696 per ounce at the beginning of 2013, but have fallen by 28% to less than US$1,200 on Dec 31, 2013, the largest drop since 1981.

Gold retail prices also dipped in the Chinese capital city. The price of a gold bar was recorded at 268 yuan (US$44.29) per gram and gold jewelry was priced at 295 yuan (US$48.73) per gram.

Many Chinese gold buyers have been happy to see the price drop as this is traditionally peak season for gold purchases before the Lunar New Year holiday and the recent slump will allow them to buy gold at relatively low prices.

A Beijing resident, identified as Zhang, said she had bought gold jewelry for her grandchild. The piece of jewelry weighs 10 grams and cost her 3,300 yuan (US$545) including the design fee.

"It is a good deal. It can be seen as an investment when gold prices go up in the future," she said.

The Chinese-language Beijing News reported that gold sales had surpassed 10 million yuan (US$1.7 million) an hour after Caibai Jewelers in Beijing opened on Jan 1, setting a new record.

Many Chinese gold jewelry vendors have launched promotions to further boost sales.

Sun Gold Jewelers stated that since international gold prices fell in December, gold sales had grown significantly at its stores. The sales had surged by at least 20% in December 2013 from a month earlier and were up by 15%, compared with the same period in 2012.

Of the sold items, products related to the upcoming Year of Horse were the most sought after in stores.