The price of gold has broken record after record this year. But it's the nature of that surge that's caught people's attention. It's basically flown against all the rules in the macroeconomic playbook. It's led some people to scratch their heads.

People wonder if there's a big mystery buyer in the market because it really doesn't make sense. One country has been key to why gold's value has soared. This bar is around 100 grams and is worth around $10,000. This has revealed just how nervous Chinese consumers are.

So what's driving this in 2024? And will it last? I have never seen their desire to hide their wealth away from somewhere as strong as now. As a bit of a primer, it's worth quickly looking at just how much gold actually exists.

The finite quantity and near indestructibility of gold underpins its value. About 212,000 tons have been mined from the Earth, it's estimated. Almost half of that is in jewelry. Most of the rest is in bars and coins

in banks or private vaults around the world. It's harder to imagine a safer asset than gold. It's a heavy thing. The logistics of even moving and stealing it, seizing it... it requires a lot of logistical thinking and legwork.

It's one way gold earned a reputation for being a haven from volatility. Gold isn't like the US dollar. The US can seize and freeze your US dollar assets very easily. We saw that in 2022. And that particular episode

is really influencing the way a lot of the emerging market world thinks about how to allocate their reserves and stay safe in a world where, at this point, who knows what's next. In the first half of 2024, the war in Ukraine and the Middle East,

as well as the prospect of lower US interest rates, all nudged the price up. So who's been driving gold prices in 2024? First, central banks. They've been buying up quite a lot of gold, hoovering it up really in the last two years.

You've had analysts from Goldman Sachs pointing to emerging market central banks as being the real driver behind gold's incredible rally this year. In fact, it's been the dominant driver of the upward gold move since 2022. The moment that Russian financial assets were blocked,

then that sparked a lot of concern from a lot of emerging markets and China in particular, that who knows, this might happen to them one day. The People's Bank of China embarked on an 18-month buying spree in 2023 and 2024,

purchasing gold to diversify away from US dollars as tensions with America grew. The central bank now sits on nearly 2300 tons. Which brings us to the other driver pushing up gold's price: China's retail market.

When you buy traditional Chinese gold jewelry, you're not just buying the design. You're quite literally buying its weight in gold. This is Chinese bangle. Normally, in the tradition, the parents, the grannies, the family will pass this Chinese jewelry down

to the next generation. So they pass it on to you as a gift, to give you a blessing. And at the same time, it's more like passing on some tangible assets to the next generation as well.

It is a tangible representation of wealth. As Chinese consumers joined the rush earlier in the year, gold's value accelerated even more. Social media was awash with hype. China is now the world's biggest retail buyer of gold,

purchasing over 1000 tonnes in 2023, mostly in jewelry. But Chinese gold demand hasn't been driven by people having extra cash – quite the opposite. China’s economy is struggling. Why does this market keep faltering?

A volatile local stock market, limited investment options, and a persistent property crisis are dragging down the Chinese economy. Over the last three years, China's property market has been battered. Homes were a key store of value for many Chinese.

As the crisis has dragged on, billions have been wiped off household wealth. Government figures have shown at least 380 million square meters of excess housing in China; that's equivalent to the size of Detroit. And despite Beijing unveiling its biggest package yet

to reduce borrowing costs, prices have continued to slump. In the last 20 or 30 years, I haven't seen, in a general sense, the Chinese population so wary about the future, the economic future. Anxiety lingers about jobs,

wages and what lies ahead for China. And I have never seen their desire to hide their wealth as strong as now. Evidence of China’s changing consumption of gold can be found here in Shenzhen’s Shuibei Market.

Nearly 14 billion US dollars of gold was sold here in 2023, but by this fall, things had changed. In October, gold's prices peaked just shy of $2,800, an all-time high.

Chinese jewelry buyers said enough is enough. Sales collapsed. So I talked to my old friends to get an idea of what has been happening in the Chinese jewelry gold market recently. They told me the sales in October were so bad that

the whole Shuibei area only sold one tonne of gold in October. In a normal month, gold sales are between 20 and 40 tonnes, even in a weak season. Chinese consumers helped push gold's price so high,

they were priced out of the jewelry they'd been buying. At the same time, those with wealth bought gold bullion, helping nudge gold's value to a record high. But why is this happening? Who's buying at this price?

I think one of the most interesting things about gold right now is that you're seeing a lot of demand for physical bullion. There are cost of carry charges associated with physical bullion, and you have to pay storage fees as well.

So if you're willing to take on those extra costs just to have a physical piece of bullion in your ownership, I think that suggests there are deeper underlying concerns about where the world is headed. Sales of bars and coins are up nearly 30 percent this year.

It all links back to anxiety. Gold is seen as the safest place to store your wealth, even when prices are this high. From time to time, I always share conversations with my friends in China. Some of them are very wealthy,

they're working across various different industries; some in mining, some in jewelry, some in batteries, some in EVs. So, like, across all different industries. And a common sentiment that I get from them is they don't feel hope for the future.

People are actually getting less comfortable and want to do something to protect their own wealth. Producer: And they what? They turn to gold? They buy physical gold bars, but obviously they are not going to store it in a bank because they will be found out.

So, like, they store it in their own place. Despite fluctuations, gold remains at a near-record high, and the trend since the millennium shows its journey. If fear and instability have underpinned the rally, then 2025 will see it continue.

The incoming Trump administration has threatened Beijing with 60% tariffs. Truth Social messages—at least two of them—laid out his plan, on day one, for tariffs. And, you know, we all know that Donald Trump says he loves that word, 'tariffs'.

A potential escalation of US-China trade tensions could threaten already weak Chinese growth and upend global markets. You're going to have central banks look at Trump and potentially what could be erratic foreign policy and get a little more concerned about the safety of their reserves

and their assets. And in that context, gold makes a lot of sense.

What Gold’s Crazy Run Says About China

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기록적인 금 가격과 수요 증가의 미스터리

금값은 거시경제의 예측을 뒤엎고 사상 최고치를 기록했습니다.

금의 가치 급등에는 중국의 역할이 큽니다.

2024년 수요 증가의 원동력이 무엇인지에 대한 질문이 제기됩니다.

금의 유한한 수량과 파괴되지 않는다는 점이 금의 가치에 기여합니다.

금의 가치에 영향을 미치는 요인: 지정학적 불안정성과 경제적 불확실성

금은 쉽게 압류할 수 있는 미국 달러 자산과 달리 변동성으로부터 안전한 피난처로 여겨집니다.

우크라이나와 중동의 전쟁과 미국의 금리 인하 전망이 가격 상승에 영향을 미쳤습니다.

중앙은행, 특히 신흥 시장 중앙은행은 금의 주요 구매자였습니다.

러시아 금융 자산 차단으로 인해 신흥 시장, 특히 중국에 대한 우려가 커졌습니다.

중국의 역할: 중앙은행 매입과 소매 시장 수요

중국 중앙은행은 미국 달러화에서 벗어나기 위해 대대적인 금 매입에 나섰습니다.

금 장신구를 가치 저장 수단으로 여기는 전통이 있는 중국의 소매 시장은 수요를 더욱 증가시켰습니다.

중국 전통 금 장신구는 여러 세대에 걸쳐 전해져 내려오며 실질적인 부를 상징합니다.

중국은 2023년에 1,000톤 이상의 금을 구매하는 세계 최대 금 소매 구매국입니다.

중국의 경제난과 금 소비의 변화

경기 침체에도 불구하고 중국 소비자들의 금 수요는 경제에 대한 불안감으로 인해 증가했습니다.

변동성이 큰 주식 시장, 제한된 투자 옵션, 부동산 위기는 중국 경제를 약화시켰습니다.

일자리, 임금, 미래에 대한 불안감은 금을 통해 부를 지키려는 강한 열망을 불러일으켰습니다.

심천의 슈이베이 시장은 장신구에서 금괴로 금 소비가 변화하고 있음을 보여줍니다.

10월에는 금값이 정점을 찍으면서 슈이베이의 보석 판매가 급감했습니다.

높은 가격으로 인해 많은 보석 구매자들이 가격을 낮췄고, 부유층은 금괴로 눈을 돌렸습니다.

실물 금에 대한 수요가 증가한다는 것은 미래에 대한 우려가 깊어지고 있음을 의미합니다.

중국 부유층과의 대화를 통해 미래에 대한 희망이 부족하고 재산을 보호하려는 욕구가 있음을 알 수 있습니다.

향후 전망 미-중 관계와 금의 잠재력

미중 무역 긴장이 고조될 경우 중국 경제에 더 큰 영향을 미칠 수 있습니다.

중앙은행은 보유고의 안전성에 대해 더 많은 관심을 갖게 되어 금의 매력이 높아질 수 있습니다.

What Gold’s Crazy Run Says About China

What Gold’s Crazy Run Says About China

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