Chinese housewives pick up 300 tonnes of gold in two weeks
The spot gold price was up more than $23 or 1.6% on Thursday to trade at just below $1,470 an ounce as it continues to recover from dramatic falls almost four weeks ago.
Gold suffered a $200-plus decline that began on Friday 13 April and accellerated into Monday when the metal dropped to multi-year lows of $1,326 an ounce.
Gold's fight back has come into the teeth of continued net selling of gold-backed exchange traded products (ETFs) in 2013.
Buying of gold ETFs played a huge part in gold's 12-year bull run – an ounce of the metal could be had for $330 when the first was launched.
That trend was completely reversed this year and the outflows from one of the more than 140 listed funds available, the biggest ETF – GLD – has totalled $16 billion.
It is now becoming clearer who has been picking up the gold ETF investors have been dumping: Chinese housewives.
People's Daily Online quotes Guo Tianyong, a professor at China's Central University of Finance and Economics as saying Chinese people have a "natural love for gold, but such a craze is a reflection of the very limited investment channels available in China":
According to "Voice of China" radio program, one of this year's most popular phrases may be "Chinese housewives" – as a major force which reportedly spent 100 billion yuan (US$16 billion) over the past two weeks purchasing 300 tons of gold and thus helping to sustain gold prices at US$1,468 an ounce.
China Daily reports that in Hong Kong and on the Chinese mainland bargain hunters are making the most of the lower prices:
Beijing Caishikou Department Store, the biggest gold retailer in Beijing, has been seeing daily sales worth up to 100 million yuan since late April, several times their usual sales. Local media reported that the store had taken on extra staff to cope with the gold rush.
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