Although the prices of Gold had bottomed out at a very low price at the very beginning of this year, the ethusiastic of buying gold,the most precious metal, hasn’t abated among Chinese consumers. Conversely, approximately 798 tonnes of precious metal has been purchased by Chinese consumers compared to the second largest market India (715 tonnes). There are two reasons: traditional spending habits and an increasing family income.
Rising disposable income, which had caused a growth in the amount of middle class family, has already induced an increasing demand of precious metals. In the other words, people would like to invest more money on purchasing the precious metal with their increasing income at that time. Therefore, China is recently become the top gold buyer in the world.
However, what is more important is that Chinese people always make a purchase based on their traditional spending habits. To be more specific,as golds is often seen by people as a safe haven, the decreasing of trading volume in international market didn’t really affect their inherent ideas. Thus, China’s consumption of gold was more than the second large market India.
Everything has two sides, as we can see, purchasing a great volume of gold could easily represent an increasing purchasing power ; however, it can also indicate that customers are unawareness of market change.
URL: http://money.cnn.com/2013/11/15/news/economy/china-gold/index.html?iid=SF_BN_River