1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,640 --> 00:00:11,440 Speaker 2: At the center of Shanzhen, a city in southern China 3 00:00:11,560 --> 00:00:14,520 Speaker 2: not too far from Hong Kong, lies a special little 4 00:00:14,560 --> 00:00:21,639 Speaker 2: district called Choi Bai. Choi Bay is known as a 5 00:00:21,640 --> 00:00:24,880 Speaker 2: place to go if you're looking to buy one specific thing. 6 00:00:30,600 --> 00:00:34,400 Speaker 1: Tribe is among the largest gold retail markets in the world, 7 00:00:34,479 --> 00:00:37,280 Speaker 1: and definitely the largest in China by volume of gold. 8 00:00:37,600 --> 00:00:40,720 Speaker 2: That's Bloomberg reporter Chong Jingle based in Hong Kong. 9 00:00:41,120 --> 00:00:43,839 Speaker 1: So if you go to the Shribune market there are 10 00:00:43,920 --> 00:00:48,479 Speaker 1: like more than ten thousand business clustered across several city blocks. 11 00:00:48,680 --> 00:00:52,199 Speaker 1: You will be greeted by endless rows of glittering jury 12 00:00:52,280 --> 00:00:56,280 Speaker 1: that would make your head spin, and at almost any 13 00:00:56,320 --> 00:00:59,800 Speaker 1: time of the day, the place always buzzes with crowds 14 00:00:59,800 --> 00:01:09,240 Speaker 1: of customers eagling, browsing, selecting, and snapping up their favorite pieces. 15 00:01:11,000 --> 00:01:13,959 Speaker 2: The popularity of this market has been fueled in part 16 00:01:14,080 --> 00:01:29,520 Speaker 2: by live streamers who hog their gold on doin Chinese TikTok. 17 00:01:31,040 --> 00:01:34,319 Speaker 2: And while gold has always been a popular commodity in China, 18 00:01:34,520 --> 00:01:39,280 Speaker 2: the investment demand for the precious metal is attracting attentionately. 19 00:01:39,880 --> 00:01:43,200 Speaker 1: With the slowdown in the Chinese economy, people have been 20 00:01:43,240 --> 00:01:47,080 Speaker 1: shrinking their spending on all kinds of goods. Joey purchases 21 00:01:47,200 --> 00:01:50,279 Speaker 1: like diamonds have really taken a hit as Chinese buis 22 00:01:50,320 --> 00:01:54,600 Speaker 1: have tightened their belts, But the allure of gold as 23 00:01:54,640 --> 00:01:58,120 Speaker 1: the safe place to park one's cash remains, and we 24 00:01:58,200 --> 00:02:02,280 Speaker 1: are seeing consumers showing percent and demands for investment products 25 00:02:02,360 --> 00:02:05,919 Speaker 1: like gold bars and coins as a way to safeguard wealth. 26 00:02:08,919 --> 00:02:12,600 Speaker 2: Welcome to the Big Take Asia from Bloomberg News. I'm wanh. 27 00:02:12,880 --> 00:02:15,280 Speaker 2: Every week we take you inside some of the world's 28 00:02:15,320 --> 00:02:19,560 Speaker 2: biggest and most powerful economies and the markets, tycoons and 29 00:02:19,680 --> 00:02:23,720 Speaker 2: businesses that drive this ever shifting region. Today on the 30 00:02:23,760 --> 00:02:28,600 Speaker 2: show China's Gold Rush, Why are Chinese consumers so keen 31 00:02:28,800 --> 00:02:32,280 Speaker 2: on the precious metal, what's driving the dizzying rally in 32 00:02:32,360 --> 00:02:42,200 Speaker 2: gold and how long will it last? Gold is popular 33 00:02:42,440 --> 00:02:45,600 Speaker 2: all over the world, but in China the commodity is 34 00:02:45,639 --> 00:02:50,880 Speaker 2: appreciated on a whole other level. The Chinese love gold. 35 00:02:51,000 --> 00:02:54,119 Speaker 2: It's not just a symbol of beauty, luck and fortune. 36 00:02:54,520 --> 00:02:59,919 Speaker 2: In China, gold often means something special and marks important milestones. 37 00:03:00,480 --> 00:03:03,160 Speaker 1: So when you're born, it's typical for others to give 38 00:03:03,200 --> 00:03:08,320 Speaker 1: you golden bracelets for your wrists and ankles, and when 39 00:03:08,320 --> 00:03:12,040 Speaker 1: you get married, you door yourself in gold. In Hong Kong, 40 00:03:12,080 --> 00:03:15,520 Speaker 1: where I'm based, during the wedding banquet, brides will be 41 00:03:15,600 --> 00:03:19,800 Speaker 1: covered in gold ornaments. I'm talking about gold bengals stacked 42 00:03:19,880 --> 00:03:24,160 Speaker 1: up to the elbows. These oversized twenty four cara gold 43 00:03:24,280 --> 00:03:28,359 Speaker 1: necklace are usually in the shape of pigs, which symbolizes well, 44 00:03:28,560 --> 00:03:32,000 Speaker 1: prosperity and fertility. And gold is also just the kind 45 00:03:32,000 --> 00:03:34,400 Speaker 1: of jury that you can pass on for generations. 46 00:03:34,880 --> 00:03:37,760 Speaker 2: Cho Jing, who was born in mainland China, grew up 47 00:03:37,920 --> 00:03:41,840 Speaker 2: understanding gold special role not just in Chinese culture, but 48 00:03:41,920 --> 00:03:43,200 Speaker 2: also for her family. 49 00:03:43,520 --> 00:03:47,440 Speaker 1: Actually, my parents had this ritual like every couple of years, 50 00:03:47,600 --> 00:03:52,320 Speaker 1: dates strolled into a bank like casually by some gold bars, 51 00:03:52,520 --> 00:03:56,760 Speaker 1: brinted home and locked away like it was the family treasure, 52 00:03:57,640 --> 00:04:01,120 Speaker 1: and there comes Lou the new year. They'd dust off 53 00:04:01,120 --> 00:04:04,600 Speaker 1: the statue and let me marvel at the shiny golds 54 00:04:04,640 --> 00:04:07,840 Speaker 1: bars like I was holding a piece of pirate. 55 00:04:07,520 --> 00:04:11,200 Speaker 2: Louwait, so they would like on lunar new Year, open 56 00:04:11,280 --> 00:04:12,800 Speaker 2: up the safe and bring out the gold. 57 00:04:13,320 --> 00:04:19,320 Speaker 1: Yes, and there would show the goads to me and say, look, 58 00:04:19,839 --> 00:04:21,120 Speaker 1: this is our treasury. 59 00:04:21,440 --> 00:04:25,159 Speaker 2: Wow, now, out of curiosity, how many bars would there be? 60 00:04:25,240 --> 00:04:33,839 Speaker 2: Typically this is a secret, of course, chong Jing says. 61 00:04:34,000 --> 00:04:37,479 Speaker 2: A lot of older Chinese stash their gold at home. 62 00:04:37,960 --> 00:04:40,920 Speaker 2: She says it's kind of a tradition. The older generation 63 00:04:41,279 --> 00:04:43,040 Speaker 2: like to have their wealth where they can see it 64 00:04:43,360 --> 00:04:45,840 Speaker 2: and touch it when they want to. They prefer that 65 00:04:45,960 --> 00:04:48,719 Speaker 2: to keeping it in an account in some faraway bank 66 00:04:49,080 --> 00:04:53,279 Speaker 2: converted to a currency that risks depreciating with inflation. But 67 00:04:53,400 --> 00:04:56,960 Speaker 2: recently chong Jing noticed that buying gold isn't just a 68 00:04:57,000 --> 00:05:00,920 Speaker 2: thing that older Chinese do. Young people in China are 69 00:05:00,960 --> 00:05:03,280 Speaker 2: now also flocking to the gold markets. 70 00:05:03,720 --> 00:05:06,680 Speaker 1: We have seen young people spending their savings often not 71 00:05:06,760 --> 00:05:11,800 Speaker 1: too much like on gold purchasing. Actually, consumers aged eighteen 72 00:05:11,960 --> 00:05:15,040 Speaker 1: to thirty four now make up over a third of 73 00:05:15,080 --> 00:05:16,480 Speaker 1: gold jury sales. 74 00:05:16,279 --> 00:05:18,680 Speaker 2: And changing what kind of gold are they buying? 75 00:05:19,000 --> 00:05:22,159 Speaker 1: They usually buy small pieces of gold jewelry around five 76 00:05:22,200 --> 00:05:26,440 Speaker 1: to six grams. It's just like small pieces gold ear rings, 77 00:05:26,760 --> 00:05:31,440 Speaker 1: gold bracelets, and gold rings. I don't think young people 78 00:05:31,560 --> 00:05:35,320 Speaker 1: are so much into gold bars. They're usually into like 79 00:05:35,360 --> 00:05:37,800 Speaker 1: gold beans, those little things. 80 00:05:37,560 --> 00:05:39,840 Speaker 2: Gold beans like the size of a jelly bean. 81 00:05:40,440 --> 00:05:42,919 Speaker 1: Yes, what do you do with gold beans. They just 82 00:05:43,000 --> 00:05:47,800 Speaker 1: save it in a small bottle. Every month they will 83 00:05:47,839 --> 00:05:50,960 Speaker 1: collect a gold bean and put it into the bottle, 84 00:05:51,880 --> 00:05:52,360 Speaker 1: so it's. 85 00:05:52,240 --> 00:05:55,919 Speaker 2: Like a little visual piggy bang of gold beans. Yes, 86 00:05:56,120 --> 00:06:01,040 Speaker 2: exactly changing. Talk to several young people who bought gold 87 00:06:01,120 --> 00:06:04,640 Speaker 2: in Shroi Bay, some of them even traveled across several 88 00:06:04,680 --> 00:06:08,640 Speaker 2: provinces some hundreds of miles to the market. They told 89 00:06:08,680 --> 00:06:11,640 Speaker 2: her that Shoibet is a great attraction for a couple 90 00:06:11,640 --> 00:06:15,440 Speaker 2: of reasons, and not just for the gold. 91 00:06:15,920 --> 00:06:18,440 Speaker 1: First, it's because there are a lot of good quality 92 00:06:18,520 --> 00:06:22,640 Speaker 1: knockoffs Ashrebe. You can get jury pieces that look just 93 00:06:22,760 --> 00:06:26,359 Speaker 1: like those from VanClief and Oppos or Tiffany's just for 94 00:06:26,520 --> 00:06:27,640 Speaker 1: a fraction of the cost. 95 00:06:28,120 --> 00:06:33,360 Speaker 2: Another main draw is Shroybet's straightforward pricing system. 96 00:06:32,920 --> 00:06:35,680 Speaker 1: So jury here is sold on a simple formula, which 97 00:06:35,720 --> 00:06:38,880 Speaker 1: is really interesting. So the formula is a base gold 98 00:06:38,960 --> 00:06:43,320 Speaker 1: price packed to the exchange benchmark and the craftsmanship fee 99 00:06:43,720 --> 00:06:47,880 Speaker 1: of around ten ym program and a lot of people 100 00:06:47,960 --> 00:06:49,279 Speaker 1: will bargain for the price. 101 00:06:49,920 --> 00:06:53,599 Speaker 2: Schroy Bay isn't just the largest gold retail market in China, 102 00:06:54,000 --> 00:06:57,440 Speaker 2: it's also a manufacturing hub, which means. 103 00:06:57,520 --> 00:07:00,680 Speaker 1: You can also diy your own design theer. You can 104 00:07:00,720 --> 00:07:03,360 Speaker 1: go there and melt your jury into gold bars, and 105 00:07:03,600 --> 00:07:06,440 Speaker 1: you can also do the opposite, melt your gold bars 106 00:07:06,440 --> 00:07:07,640 Speaker 1: into diy jewelry. 107 00:07:08,000 --> 00:07:10,880 Speaker 2: So you can actually bring literal gold that's sitting around 108 00:07:10,920 --> 00:07:13,240 Speaker 2: your house and they'll melt it in front of you. Yes, 109 00:07:14,160 --> 00:07:16,960 Speaker 2: Chong Jing says. Young people in China used to think 110 00:07:17,000 --> 00:07:20,560 Speaker 2: gold jewelry was tacky, something the nuvo riche would wear 111 00:07:20,600 --> 00:07:24,320 Speaker 2: to show off. But that's changing, and now young consumers 112 00:07:24,360 --> 00:07:27,680 Speaker 2: are stashing gold for the same reason as their parents. 113 00:07:28,080 --> 00:07:31,520 Speaker 1: They see gold as a secure option compared to other investments. 114 00:07:32,120 --> 00:07:35,280 Speaker 1: You know, at a time when the Chinese stock market 115 00:07:35,320 --> 00:07:38,680 Speaker 1: has seen a lot of turbulence, the economy has been 116 00:07:38,720 --> 00:07:42,800 Speaker 1: hammered by the slump in the real estate market. That's 117 00:07:42,840 --> 00:07:47,920 Speaker 1: really sent consumer confidence plunging, not to mention a depreciating currency. 118 00:07:48,680 --> 00:07:51,960 Speaker 2: This frenzy demand from China helped push the country to 119 00:07:52,000 --> 00:07:55,400 Speaker 2: beat India as a world's top consumer of gold jewelry. 120 00:07:55,440 --> 00:07:57,040 Speaker 2: In twenty twenty three. 121 00:07:57,080 --> 00:08:00,280 Speaker 3: Gold and Focused a just shy of twenty eight hunundreds 122 00:08:00,280 --> 00:08:03,040 Speaker 3: dollars here, but this is off note. It is an 123 00:08:03,080 --> 00:08:06,640 Speaker 3: all time record high. Yet again, a fresh record for 124 00:08:06,920 --> 00:08:08,440 Speaker 3: the safe haven here. 125 00:08:08,560 --> 00:08:13,360 Speaker 2: And how long can the gold rally last and will 126 00:08:13,360 --> 00:08:16,000 Speaker 2: a new president in the White House change its course. 127 00:08:16,680 --> 00:08:30,280 Speaker 2: That's after the break. Gold prices reached a record high 128 00:08:30,520 --> 00:08:33,480 Speaker 2: of about two thousand, seven hundred and ninety dollars per 129 00:08:33,559 --> 00:08:38,200 Speaker 2: ounce last October. Analysts say central bank buying is what's 130 00:08:38,200 --> 00:08:42,400 Speaker 2: been driving gold prices up. Here's Samantha Dart, co head 131 00:08:42,520 --> 00:08:45,160 Speaker 2: of Global Commodities Research at Goldman Sachs. 132 00:08:45,480 --> 00:08:48,880 Speaker 3: It's been the dominant driver of the upward gold moved 133 00:08:48,960 --> 00:08:55,080 Speaker 3: since twenty two. The moment that Russian financial assets were blocked, 134 00:08:55,679 --> 00:08:58,839 Speaker 3: then that sparks a lot of concern from a lot 135 00:08:58,880 --> 00:09:02,160 Speaker 3: of emergin markets, and in particular that who knows this 136 00:09:02,320 --> 00:09:05,400 Speaker 3: might happen to them one day. So central bank buying 137 00:09:05,520 --> 00:09:09,800 Speaker 3: has stepped up significantly fivefold from the average that we 138 00:09:09,840 --> 00:09:11,959 Speaker 3: observed prior to twenty twenty two. 139 00:09:12,480 --> 00:09:16,559 Speaker 2: And Bloomberg's changing Lee says China's central bank has been 140 00:09:16,640 --> 00:09:18,960 Speaker 2: front and center of the gold rally. 141 00:09:19,040 --> 00:09:21,920 Speaker 1: The People's Bank of China went on gold buying spree 142 00:09:22,040 --> 00:09:25,560 Speaker 1: for eighteen three months in twenty twenty three that ended 143 00:09:25,679 --> 00:09:29,240 Speaker 1: in a pro last year. This was its longest ever 144 00:09:29,360 --> 00:09:33,240 Speaker 1: run of purchases. It was looking to diversify its reserves 145 00:09:33,280 --> 00:09:37,160 Speaker 1: away from the dollar and hedge against currency depreciation, and 146 00:09:37,600 --> 00:09:41,679 Speaker 1: after a half year break, in November, shortly after the 147 00:09:41,679 --> 00:09:45,800 Speaker 1: gold reached its historical high, the Chinese Central Bank actually 148 00:09:45,840 --> 00:09:49,079 Speaker 1: resumed its gold buying, so we can see how caen 149 00:09:49,200 --> 00:09:52,200 Speaker 1: they are on buying the precious medal even as gold 150 00:09:52,240 --> 00:09:53,760 Speaker 1: prices remained elevated. 151 00:09:54,400 --> 00:09:58,559 Speaker 2: Besides China's central Bank, there have been other factors driving 152 00:09:58,600 --> 00:09:59,800 Speaker 2: gold prices. 153 00:09:59,520 --> 00:10:02,720 Speaker 1: Up last year. The gains in gold were also helped 154 00:10:02,760 --> 00:10:06,400 Speaker 1: by the US Federal reserves pivot to a loser monitored policy, 155 00:10:06,920 --> 00:10:10,320 Speaker 1: and when FED was in a rate cutting cycle, so 156 00:10:10,720 --> 00:10:14,000 Speaker 1: when the interest rate comes down, demand for interest based 157 00:10:14,040 --> 00:10:17,720 Speaker 1: safe haven investments like bonds may fall, leaving a safe 158 00:10:17,720 --> 00:10:21,600 Speaker 1: haven void in many portfolios. This helps boost the demand 159 00:10:21,640 --> 00:10:25,080 Speaker 1: for gold, but looking ahead, gold may face some pressure 160 00:10:25,160 --> 00:10:27,920 Speaker 1: as FED officials have emphasized the need to take a 161 00:10:27,920 --> 00:10:31,440 Speaker 1: more cautious approach to cut RAAIG this year because they're 162 00:10:31,480 --> 00:10:33,720 Speaker 1: starting to again worry about inflation. 163 00:10:34,720 --> 00:10:38,640 Speaker 2: Gold prices in January have eased since October's record, but 164 00:10:38,679 --> 00:10:42,199 Speaker 2: they remained some thirty percent higher year on year, and 165 00:10:42,360 --> 00:10:45,280 Speaker 2: ongoing global turmoil from unrest in the Middle East to 166 00:10:45,320 --> 00:10:49,120 Speaker 2: political chaos in South Korea is expected to sustain the 167 00:10:49,160 --> 00:10:50,120 Speaker 2: demand for gold. 168 00:10:50,760 --> 00:10:54,120 Speaker 1: So when politics get messy, gold gets popular. 169 00:10:54,200 --> 00:10:56,760 Speaker 2: I always say tariffs is the most beautiful word. 170 00:10:56,600 --> 00:10:58,800 Speaker 3: To me in the dictionary. 171 00:10:58,400 --> 00:11:01,640 Speaker 2: And because tariffs gonna make as rich as hell, it's 172 00:11:01,679 --> 00:11:05,120 Speaker 2: going to break our countries. Business is back. 173 00:11:05,720 --> 00:11:08,800 Speaker 1: Tensions from a potential trade war between US and China 174 00:11:09,200 --> 00:11:13,160 Speaker 1: or with the US's other top trading partners could drive 175 00:11:13,200 --> 00:11:16,520 Speaker 1: gold prices and demand for the safe haven asset, and 176 00:11:16,640 --> 00:11:20,760 Speaker 1: traders are also watching out for what implications US President 177 00:11:20,840 --> 00:11:25,400 Speaker 1: Donald Trump's domestic policies would have, such as on tariffs, 178 00:11:25,880 --> 00:11:30,680 Speaker 1: tax cuts, and immigration. All of these economists say could 179 00:11:30,800 --> 00:11:34,160 Speaker 1: impact the country's finances and re ignite inflation. 180 00:11:36,440 --> 00:11:39,240 Speaker 2: So changing it's a pretty complicated picture when it comes 181 00:11:39,240 --> 00:11:41,960 Speaker 2: to gold, but that doesn't appear to have lessened its 182 00:11:42,000 --> 00:11:45,600 Speaker 2: appeal to Chinese buyers. What's your sense on how long 183 00:11:45,679 --> 00:11:47,440 Speaker 2: this gold mania might last? 184 00:11:48,559 --> 00:11:53,080 Speaker 1: Annaly say the market our looker remains strong because gold 185 00:11:53,240 --> 00:11:57,280 Speaker 1: is a symbol of wealth and prosperity, and people always 186 00:11:57,280 --> 00:12:01,880 Speaker 1: buy jury as gifts for festivals and these. There are 187 00:12:01,920 --> 00:12:07,080 Speaker 1: also analysts saying that consumers often delay or cut back 188 00:12:07,120 --> 00:12:12,520 Speaker 1: on gold purchases when prices rise sharply, so there might 189 00:12:12,559 --> 00:12:16,600 Speaker 1: be a little volatilities out there, but this will not 190 00:12:16,720 --> 00:12:20,160 Speaker 1: change the fundamentals of gold consumption in China, which is 191 00:12:20,800 --> 00:12:23,000 Speaker 1: which is people like gold and will buy it. 192 00:12:28,760 --> 00:12:31,520 Speaker 2: This is The Big Take Asia from Bloomberg News. I'm 193 00:12:31,520 --> 00:12:34,240 Speaker 2: wan ha and a happy Lunar New Year to all 194 00:12:34,280 --> 00:12:37,920 Speaker 2: of you who celebrated. This episode was produced by Young Young, 195 00:12:38,080 --> 00:12:41,560 Speaker 2: Naomi and Jessica Beck. It was mixed by Omer Sultan, 196 00:12:41,760 --> 00:12:44,920 Speaker 2: sound designed by Jessica, and fact checked by Young and Naomi. 197 00:12:45,480 --> 00:12:48,680 Speaker 2: It was edited by Caitlin Kenny, Patty Hirsch, Jessica Joe, 198 00:12:48,840 --> 00:12:52,559 Speaker 2: and Sybylla Gross. There was additional reporting by Alfred Sound. 199 00:12:53,280 --> 00:12:56,679 Speaker 2: Naomi Shaven is our senior producer, Elizabeth Ponzo is our 200 00:12:56,720 --> 00:13:00,360 Speaker 2: senior editor, Nicole Beemster Bower is our executive producer, and 201 00:13:00,440 --> 00:13:04,000 Speaker 2: Sage Bauman is Bloomberg's head of Podcasts. Please follow and 202 00:13:04,080 --> 00:13:06,839 Speaker 2: review The Big Take Asia wherever you listen to podcasts. 203 00:13:06,880 --> 00:13:09,520 Speaker 2: It really helps new listeners find the show. See you 204 00:13:09,559 --> 00:13:10,000 Speaker 2: next time.