{"id":67952,"date":"2023-10-02T16:37:40","date_gmt":"2023-10-02T20:37:40","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/gold-glitters-in-chinas-financial-storm\/"},"modified":"2023-10-02T16:37:44","modified_gmt":"2023-10-02T20:37:44","slug":"gold-glitters-in-chinas-financial-storm","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=67952","title":{"rendered":"Gold Glitters In China\u2019s Financial Storm"},"content":{"rendered":"
\n

The Chinese yuan has lost nearly 6% of its value against the U.S. dollar this year, while Shanghai-listed stocks are off about 8% from their 2023 high, set back in May. There\u2019s an ongoing property crisis, with shares of Evergrande Group\u2014China\u2019s second-largest property developer and the world\u2019s most indebted\u2014halting trading last Thursday after its founder and chairman was reportedly taken into police custody for unknown reasons.<\/p>\n

Against this backdrop, gold has emerged as a preferred investment alternative, acting as a hedge against financial volatility.<\/p>\n

Gold prices in China have soared as a result, hitting a historic relative high with a more than $100 premium per ounce over metal prices in New York or London, according to Bloomberg. Data showing a 40% hike in withdrawals from the Shanghai Gold Exchange and a 15% increase in imports in August further underscore this trend.<\/p>\n

Looking ahead, analysts predict sustained demand for the yellow metal amid not just a depreciating yuan and shaky real estate market but also falling bond yields. The gold buying spree appears to represent an investment move\u2014sales of bars and coins are up 30% compared to last year\u2014but rising prices are also tempting jewelry buyers to make early purchases ahead of the busy Lunar New Year buying season.<\/p>\n

<\/fbs-ad><\/p>\n

Official Gold Reserves At A New Record High?<\/strong><\/h3>\n

It\u2019s not just China\u2019s retail investors. The People\u2019s Bank of China also continues to diversify its reserves with gold, so much so that one expert believes total official gold holdings by central banks have touched a new all-time high. Jan Nieuwenhuijs, writing for Gainesville Coins, estimates that global gold reserves peaked at 38,764 metric tons in June, surpassing the previous 1965 record by as much as 400 tons.<\/p>\n

Nieuwenhuijs\u2019s estimate, which accounts for unreported purchases unlike the International Monetary Fund\u2019s (IMF) calculations, shows a notable increase in gold holdings since the 2008 financial crisis, as you can see in the chart below. This reflects what he calls a \u201cdesire by central banks the world over to diversify away from the U.S. dollar with its ever more evident counterparty risks.\u201d<\/p>\n

Costco\u2014Yes, That Costco\u2014Is Selling Out Of Gold Bars. Why Not Gold ETFs?<\/strong><\/h3>\n

Costco has recently added one-ounce gold bars to its online inventory, selling out within hours of restocking. According to CNBC, the retail behemoth offers bars from South Africa\u2019s Rand Refinery and Swiss supplier PAMP Suisse, at prices slightly below the market rate of around $1,900. The offer is available only to the company\u2019s 66 million paying members, creating an exclusive buying opportunity.<\/p>\n

During the most recent earnings call, Costco CFO Richard Galanti said that the gold bars were selling like hotcakes, commenting that as soon as they\u2019re listed on the company\u2019s website, \u201cthey\u2019re typically gone within a few hours, and we limit two per member.\u201d<\/p>\n

Interestingly, the enthusiastic demand from Costco buyers contrasts significantly with dwindling holdings found in total known physical gold-backed ETFs. As I shared with you recently, holdings have continued to decline since June\u2014and, before that, since April 2022\u2014even as the price of the yellow metal has held up admirably against a strong U.S. dollar and sky-high bond yields.<\/p>\n

Last week, the price of gold dipped below $1,900 for the first time since August, but if Treasury yields continue to soar through October, it could discourage casual gold investors, potentially driving prices down toward the $1,800 mark.<\/p>\n

But then, the last time yields were this high\u2014in September 2007\u2014gold was trading at around $750. So again, the metal has been remarkably resilient in a very challenging monetary environment.<\/p>\n

Why do Indian families invest in gold? Find out by <\/em><\/strong>watching our video here!<\/em><\/strong><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Chinese yuan has lost nearly 6% of its value against the U.S. dollar this year, while Shanghai-listed stocks are off about 8% from their 2023 high, set back in May. There\u2019s an ongoing property crisis, with shares of Evergrande Group\u2014China\u2019s second-largest property developer and the world\u2019s most indebted\u2014halting trading last Thursday after its founder […]<\/p>\n","protected":false},"author":1,"featured_media":67953,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-67952","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"\nGold Glitters In China\u2019s Financial Storm | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The Chinese yuan has lost nearly 6% of its value against the U.S. dollar this year, while Shanghai-listed stocks are off about 8% from their 2023 high,\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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