The Epicenter of China’s Gold Craze Is a Former Fishing Village Demand for the precious metal has shoppers flocking to a jewelry hub in Shenzhen. By Chongjing Li and Alfred Cang October 31, 2024 https://www.bloomberg.com/news/arti...s-to-a-massive-jewelry-hub?srnd=homepage-asia In a cavernous multistory mall, customers jostle for space amid endless rows of glass display cabinets that glimmer under the bright lights. The space thrums with excitement as shoppers gaze down at bracelets, rings, necklaces and other finely crafted treasures. Welcome to Shuibei in Shenzhen, a former fishing village in southern China that’s become the epicenter of the nation’s voracious appetite for gold, and a street-level barometer of economic and market forces impacting demand. More than 10,000 businesses are clustered across several city blocks, a labyrinth of opulence that’s among the largest gold retail markets in the world. The items on display are an increasingly important store of value amid China’s stock market volatility and the freefall of its property sector. Such safe-haven appeal saw the nation beat India as the world’s top consumer of gold jewelry last year and contributed to a record rally in global prices. Gold has surged above $2,700 an ounce, driven by geopolitical tensions, violence in the Middle East and the prospect of lower US interest rates. A stroll around the bustling area of Shenzhen, a city of almost 18 million people, offers an insight into China’s enduring passion for the precious metal, even as a struggling economy and record prices have hurt sales in recent months. Chinese traditionally gift gold to loved ones to bring them luck, and on a weekend in late October, old and young alike clamored for bargains. Couples shopped for wedding rings, doting grandparents searched for heirloom gifts and teenagers scouted out high-end fashion accessories. Consumers are shopping for gold jewelry at the Shuibei International Jewelry Trading Center. More than 10,000 jewelry businesses are clustered across several city blocks.Photographer: NurPhoto/Getty Images Struggling Economy Laura Ye, who runs a jewelry store in the area, said business was slower than last year. “With the overall economy down this year, every industry is feeling it,” she said. But even amid rising prices, “people are rushing to buy gold.” There are “endless traffic jams” and even finding a space to park an e-bike can be difficult, Ye added. Twenty-something friends Dai and Wei appeared undeterred by the high prices and gloomy economy. “I also invest in funds, but they’ve been a disaster,” said Wei with a wry smile, after buying a pair of hoop earrings weighing about 10 grams. “The market spiked Friday, so I recouped a bit. Now I’m back to buying gold for security and to refresh my collection.” Dai said she had a “sudden awakening” on the appeal of gold about two years ago when she noticed the rising prices. “I’ve bought gold about three times this year,” she said, as she sat by a shop window picking out tiny earrings for one of her friends. “I usually stick to smaller pieces, around five to six grams” which are affordable on her 7,000 yuan ($980) monthly salary. Like Wei, she only wanted to give her family name due to privacy concerns. Shuibei’s sprawling market, which is about a one-hour trip from Hong Kong by high-speed train, sells more than 100 billion yuan of jewelry a year, according to district authorities. It is also the largest manufacturing and processing hub for gold jewelry in China, responsible for about 70% of production. Security is tight, with clusters of CCTV cameras trained on each stall. Its draw lies in competitive pricing, which often undercuts established brands. Jewelry here is sold on a simple formula of a base gold price pegged to the exchange benchmark and a craftsmanship fee of around 10 yuan per gram. Shuibei is the country’s largest manufacturing and processing hub for gold jewelry in China.Photographer: NurPhoto/Getty Images The market’s popularity has been fueled by livestreamers, who are ubiquitous across Chinese social media platforms. Among them is Shuibei Little Fatty, who promotes the numerous bargains on offer to viewers across the country. “Hey, sisters! I’m at the Shuibei market in Shenzhen right now,” yells the appropriately named host, a somewhat plump, balding man in a purple T-shirt, in an Oct. 20 stream on the platform Douyin, China’s equivalent of TikTok. “Take a look at the big screen! Today’s live gold price is 623 (yuan per gram). If you’re not following me yet, hit that follow button!” His phone camera sweeps across the mall, its glass cases glittering. “Sundays are busy, but wait until 3:30 p.m. By then, it’s so packed that you can’t even move!” His voice rises with excitement, as the livestream captures the hum of bartering and the gleam of polished metal. “First order of the day! A sister from Shanghai snatched up a five-flower bracelet for only 10,000 yuan,” reads a Sept. 25 post from Little Fatty. It pictures a bracelet strikingly similar to a Van Cleef & Arpels Vintage Alhambra bracelet, which typically retail for almost 50,000 yuan. Another key attraction for Shuibei is the huge variety of items on offer across stores spread over more than 1,000 square meters. For one visitor, at least, it was all too much. “Three malls down, where next?” muttered a man, yawning as he dragged himself behind his partner, clearly worn out. Falling Sales Prices on the Shanghai Gold Exchange, China’s flagship precious metals bourse, had been more than $20 per ounce higher than the global benchmark in New York for most of the past year. But in recent months that premium has reverted to a discount. Jewelry consumption tumbled 29% to 130 tons in the third quarter, according to the China Gold Council. A stimulus blitz that kicked off in late September to support economic growth should ultimately boost gold demand again, according to Ray Jia, China research head for the World Gold Council. But he cautioned that appetite for gold investment “may face competition from other assets including equities and property as the economy recovers.” Analysts say the market outlook remains strong in a nation where gold is a symbol of wealth and prosperity and people buy jewelry as gifts for festivals and anniversaries. In many regions couples receive a four-piece set of jewelry including a ring, bangle, necklace and earrings on their betrothal. Song Jiangzhen, a researcher at Guangdong Southern Gold Market Academy, said consumers often delay or cut back on gold purchases when prices rise sharply. “However, this will not change the fundamentals of gold consumption in China,” he said. It’s a view shared by many visitors to Shuibei. “If I buy anything, it’s going to be gold,” said Luo Jiejing, a Shenzhen hotelier, as he stood outside the market. “It’s been around for thousands of years and holds its value. It is a rational choice.” — With assistance from Allen K Wan and Lulu Shen
Billionaire Paulson Says Central Banks Will Keep Buying Gold Billionaire John Paulson, president and founder of Paulson & Co.Source: Bloomberg Television By Jacob Lorinc April 22, 2025 https://www.bloomberg.com/news/arti...lson-says-central-banks-will-keep-buying-gold Central banks will keep buying gold in a push to diversify away from paper currencies amid political and economic upheaval, according to billionaire hedge-fund manager John Paulson. Paulson, one of the biggest bullion fans on Wall Street, says the precious metal is “moving to a new level of valuation” as investors flee from US stocks, bonds and the dollar to haven assets while an expanding global trade war casts a shadow over the economic outlook. “The trend will continue, and the voracity of that trend will depend on political developments,” Paulson said in an interview. Gold briefly topped $3,500 an ounce for the first time ever on Tuesday following President Donald Trump’s repeated calls on the US Federal Reserve to cut interest rates immediately. The founder of Paulson & Co Inc. has long touted his preference for gold and is heavily invested in mining firms through his family office. The financier teamed up with Novagold Resources Inc. on Tuesday to buy out Barrick Gold Corp.’s 50% stake in an Alaskan gold project for $1 billion, betting on favorable conditions for major projects in the US under the Trump administration. Bullion is up about 30% this year, outperforming nearly every other major asset class. A surge of buying from central banks is what’s going to drive the speed of bullion price increases, Paulson said. “The primary driver of gold demand was central banks trying to increasingly diversify out of paper currencies and into gold as a reserve currency,” he said. “I don’t think that’s going to change.” — With assistance from Liana Baker
In Dubai’s Gold Souk, bullion’s record run brings little joy for jewellers One impact from recent trade tensions with the US has been accelerated talk about finding alternative markets and production hubs. Tuesday 22/04/2025 https://thearabweekly.com/dubais-gold-souk-bullions-record-run-brings-little-joy-jewellers The shop window of a jewellery store in Dubai, March 10, 2025. (AFP) DUBAI In the bustling Gold Souk in Dubai, dubbed the “City of Gold,” 22-carat gold jewellery is a traditional favourite for weddings, religious celebrations and as a family investment. Yet with bullion prices hitting record highs above $3,400 an ounce, there are signs of change, as buyers look to diamonds and lighter gold jewellery, instead. While US tariffs and other factors have added fire to already hot demand for gold as an investment, the impact is different for gold jewellery, according to Andrew Naylor, head of Middle East and Public Policy at the World Gold Council (WGC). “In markets like Dubai, this creates a two-fold effect: on one hand, you see stronger interest in gold as a safe-haven asset, on the other, high prices dampen jewellery demand.” At Dubai’s Gold Souk, retailers said they are seeing this trend, as current prices prompt shoppers to look for alternatives. “There are no potential customers nowadays because of the gold prices,” said Fahad Khan, a sales representative at retailer Damas Jewellery. “It’s a little bit tough to afford gold, so I think it’s better to go with diamonds,” said Lalita Dave, 52, as she browsed around the Gold Souk. Lab-grown diamonds Dubai has been a magnet for gold buyers for at least 80 years, starting with Iranian and Indian traders, both cultures sharing a tradition of 22-carat jewellery for adornment and investment. Yet as gold prices rose 27 percent last year, demand for gold jewellery in the UAE fell by around 13 percent, outpacing an 11 percent drop globally, according to the WGC. Jewellery demand could face further pressure across key regions in 2025 if gold prices remain elevated or volatile, the WGC said in its gold demand trends report published in February. Price swings, more than price levels, are increasingly shaping consumer behaviour, particularly in India, it noted. Shifts in Indian purchasing patterns often ripple through Gulf markets such as the UAE, where buyers are a key driver of sales. Goldman Sachs recently raised its end-2025 gold forecast to $3,700 per ounce and said prices could climb as high as $4,500. “Higher gold prices are likely to dampen demand for jewellery, in a classic example of how the best cure for high prices is high prices,” said Russ Mould, investment director at AJ Bell. One sign of economising has been the rise of lab-grown diamonds. India exported $171 million worth of lab-grown diamonds to the UAE in 2024, up almost 57 percent from $109 million two years earlier, data from the Gem and Jewellery Export Promotion Council showed. India’s exports of cut and polished diamonds to the UAE in the April-November 2024 were up 3.7 percent. UAE ranked third in global diamond imports in 2023, trade data shows, its primary trade partners including India, South Africa and Belgium. While the UAE accounted for just 1.5 percent of the global diamond jewellery market by revenue in 2023, it is projected to grow by 5.9 percent annually to reach nearly $2 billion by 2030, according to Grand View Research. That outpaces the global growth forecast of 4.5 percent and makes the UAE the fastest growing market in the Middle East and Africa. Trade tensions One impact from recent trade tensions with the US has been accelerated talk about finding alternative markets and production hubs, two executives at major Indian diamond exporters said. If tensions persist, potentially spanning years, one of the sources speaking on condition of anonymity said his company’s contingency plans included shifting some Indian production overseas, including to the UAE. Shamlal Ahamed, managing director of international operations at retailer Malabar Gold & Diamonds, said the rise in lab-grown diamond jewellery sales in the UAE appeared to be driven more by design preferences than pricing and he remained bullish on gold jewellery demand. “While price-conscious buyers may wait for a dip, our experience shows that such declines are often short-lived, with buyers quickly adapting to new price levels.” Written By Manya Saini