🌟 December 2024: A Golden Wrap-Up of China’s Gold Market and Its Impact on China Gold Trends
As 2024 closed out, China’s gold market served up a mix of highs and lows, with the year marked by record-breaking performances, rising investor interest, and seasonal trends in China gold. Here’s the scoop on what went down and what’s ahead.
🪙 Gold Prices: Diverging Paths, Stunning Gains
- The LBMA Gold Price in USD dipped by 2% in December, while the Shanghai Gold Benchmark Price (SHAUPM) in RMB edged up 0.1%.
- Despite the slight December dip, 2024 was a blockbuster year for gold:
- USD gold price: Up 27%, its best performance since 2010.
- RMB gold price: Soared by 28%, its highest gain since 2009.
- Key drivers? Spiking geopolitical risks, central bank purchases, and a weakened Chinese yuan.
💼 Gold ETFs: Smashing Records
- Chinese gold ETFs hit an all-time high with assets under management (AUM) reaching RMB 71 billion (US$9.7 billion), a jaw-dropping 150% increase over the year.
- December alone saw a RMB 4.5 billion (US$635 million) inflow, bringing holdings to a record 115 tonnes.
- Why the surge?
- Strong gold prices.
- Falling government bond yields, signaling more rate cuts.
- A weakening local currency that boosted safe-haven demand.
🏦 Central Bank Keeps Buying
- The People’s Bank of China (PBoC) added 10 tonnes of gold in December, its second consecutive month of purchases.
- For 2024, the PBoC announced 44 tonnes of gold acquisitions, pushing official holdings to 2,280 tonnes, or 5.5% of its foreign exchange reserves.
🛍️ Wholesale and Jewelry Demand: Mixed Signals
- December brought seasonal strength, with gold withdrawals from the Shanghai Gold Exchange (SGE) rising 24% month-over-month to 122 tonnes.
- However, 2024’s overall wholesale demand was lackluster:
- Total withdrawals: 1,455 tonnes, down 15% from 2023 and 22% below the 10-year average.
- A surge in gold prices and economic uncertainties kept consumers cautious about buying jewelry, though investment demand partially offset the decline.
✈️ Imports on the Rise
- Gold imports climbed seasonally, rising 36% in November to 108 tonnes as retailers prepared for the Chinese New Year shopping frenzy.
- However, imports for the year remained 23% lower year-on-year and below pre-COVID averages, reflecting softer wholesale demand.
🎉 Looking Ahead: A Festive Start to 2025
- The Chinese New Year (28 January – 4 February) is expected to boost gold jewelry demand, thanks to the holiday tradition of gifting gold.
- Investment buying will likely stay strong, supported by:
- A weak yuan.
- Anticipation of further rate cuts.
- Concerns about rising U.S. tariffs.
🔮 What It Means for 2025
As we step into the new year, China’s gold market is gearing up for a festive boost and steady investment demand. With the PBoC continuing its gold-buying streak and ETFs in high demand, all signs point to gold maintaining its allure as both a safe-haven and a solid investment choice.
💡 Pro Tip: Keep an eye on global economic trends, currency movements, and central bank policies—they’re shaping the golden landscape of 2025!
What do you think about China’s role in the gold market? Let us know in the comments below! 💬