Chinese young people are turning to gold to protect and grow their wealth in a time of economic uncertainty.
According to a recent article in the Straits Times, solid gold beans weighing as little as 1 gram, along with gold jewelry, are increasingly viewed as “the safest investment bet,” particularly among China’s Gen Z.
“It is part of a larger consumer trend for all things gold – from bullion to beans and bracelets – that has gripped the mainland.”
Tina Hong is an 18-year-old college student. She told the Straits Times she started investing in gold beans because of their relatively low price. She can buy the beans for as little as 600 yuan ($113) per gram.
“It’s basically impossible to lose money from buying gold,” she said.
The beans come in glass jars and are marketed as an investment entry point for young people.
London-based Metals Focus Ltd. managing director Nikos Kavalis told the Straits Times that Chinese young people are limiting “pleasurable consumption” and purchasing “asset-style jewelry.”
Kavalis noted that the price of gold beans and other lower-priced gold products in China can run as much as 30 percent over the spot price of gold. He recommended investing money in gold ETFs instead. But ETFs come with their own risks.
In most cases, investing in an ETF does not entitle you to any amount of physical gold. You own a share of the ETF, not gold itself. This introduces significant counterparty risk.
Three-quarters of Chinese gold consumers are estimated to be in the 25 to 35 age range.
In fact, gold has gone viral in China. On the social media platform Weibo, similar to X, the hashtag, “Why are young people getting into buying gold” recently garnered 91 million hits. One popular post proclaimed, “Buying gold keeps trouble at bay.”
China’s Gen Z faces high unemployment. Meanwhile, economic growth is slow, interest rates are low, and the stock market is extremely volatile. One of the key stock market benchmarks has dropped to 2018 levels. Real estate prices have also tanked.
According to the Straits Times, “a lack of faith in traditional investments” has fueled a “gold rush” in China.
Sales of gold, silver, and jewelry jumped by 29.4 percent on an annual basis in December, according to government data reported by the Straits Times, a 6-year high.
