Chinese Have "Grabbed Gold By The Throat"

4.25.24 - Chinese Have "Grabbed Gold By The Throat"

Gold last traded at $2,332 an ounce. Silver at $27.40 an ounce.

Chinese Have "Grabbed Gold By The Throat" As Capital Flight Accelerates -ZeroHedge

"Chinese speculators have really grabbed gold by the throat..."

That is how John Reade, chief market strategist at the World Gold Council, describes the scramble in the communist nation among investors looking to move money anywhere but in the yuan or Chinese assets.

As evidenced by soaring Chinese FX outflows, the recent surges in 'alternate currencies' such as bitcoin and gold strongly suggest where the Chinese are seeking safety.

Of course, worsening geopolitical tensions, unprecedented fiscal profligacy by the Biden administration that shows no signs of slowing, and a Fed that seemed willing to support that spending with rate-cuts that were wholly un-necessary based on the 'data' they are so 'dependent' on (prompting fears of a policy error) are all factors driving precious metals higher, but, as Bloomberg reports, juicing the rally is unrelenting Chinese demand, as retail shoppers, fund investors, futures traders and even the central bank look to bullion as a store of value in uncertain times.

China and India have typically vied over the title of world's biggest buyer. But that shifted last year as Chinese consumption of jewelry, bars and coins swelled to record levels. China's gold jewelry demand rose 10% while India's fell 6%. Chinese bar and coin investments, meanwhile, surged 28%.

And there's still room for demand to grow, said Philip Klapwijk, managing director of Hong Kong-based consultant Precious Metals Insights Ltd. Amid limited investment options in China, the protracted crisis in its property sector, volatile stock markets and a weakening yuan are all driving money to assets that are perceived to be safer.