Chinese New Year of the Dragon to Boost Demand for Gold
China, the second-largest gold-jewelry market after the United States, is expected to increase iits consumption by as much as 35% according to Frost & Sullivan, a global research and consulting company.
Chinese custom calls for the gifting of gold for weddings, birthdays and holidays.
The week-long holiday to mark the New Year commences on January 23rd. The theme for the Chinese New Year is “Year of the Dragon”, the Dragon is considered auspicious in the Chinese culture. Happiness, wealth and longevity are the hallmark of the Chinese New Year.
Countries with similar culture with China such as Taiwan, Hong Kong, Vietnam and Thailand will also boost the demand for the precious metal during the region’s festive period.
Gold prices have continued to rally for 5 consecutive days after taking a beating due to price correction and a chunk of the commodity holders cashing in on their gains at the end of the year. Gold advanced 10% last year.
Since December 30th, the price of the precious metal has advanced close to 5% to approximately about $1,623/tr oz. Futures prices for the commodity have also advanced on the Comex.
Demand for the commodity is expected to increase as the Chinese New Year approaches.