The Chinese New Year of the Metal Tiger Boosts Gold Sales

The gold jewellery market in China is seeing a boost in demand as people are celebrating the Chinese New Year. As the coming Spring Festival, China is busy preparing to celebrate the year of the tiger. In Beijing, shoppers are snapping up tiger-themed gold gifts.　

Larry Chan has more.

Reporter:

For many Chinese buying gold is a popular way to invest their hard-earned money. The Cai Bai store, located in one of capital's busiest shopping districts, has been buzzing with thousands of eager festive shoppers.　

Customers can buy all sorts of precious gifts here, from small gold necklaces to more lavish gold ingots and statues.　

Li Chi, sales manager at Cai Bai, says the Spring Festival is always a big time for people to buy gifts for friends and family.　

"Every spring festival we have a lot of customers, because the festival is the most important celebration of the year. People have worked hard for the whole year and want to buy some gifts for their family, friends and for themselves."

During the festive period as many as 4,000 people may walk through the shop's doors in one weekend.　

The store has earned more than 17 million US dollars in a day's trading during the Spring Festival in 2009. Li Chi says this year they expect to top their 2009's best-selling day by around 15 to 20 percent.　

Tiger designs are not only limited to figurines. There are also gold bars with tiger motifs on them.　Some shoppers are also snapping up the 1 kilo gold bars that retail at around 40 thousand US dollars.　

Li Chi says this type of gold bar has been specially commissioned by the Cai Bai company to celebrate the year of the tiger.

With these kind of sales, sales assistants have little time to stop counting cash while other shoppers stand in line to be served.　

Yet the Spring Festival is not only about spending lots of money on super-expensive presents, for some it is about sharing a simple gift with a loved one.　

Tian Ran is a shopper who has been looking for a gift for her mother who was born in the year of the tiger. The Chinese horoscope is based on the lunar calendar. In total there are twelve animal signs, representing different yearly cycles. Those born in the year of the tiger are thought to be brave, resilient, friendly and vain.　

She says she hopes the gift will bring her mother good luck, and since the tiger is the king of all animals her mother should have a special year.　

"This year is the year of tiger. So to display a gold tiger decoration at home shows good luck, strength and power, because the tiger represents the king of all the animals."

According to data released by the World Gold Council, China has now become the world's second largest consumer of gold after India.

Liu Yuning is the general manager of Jing Yi Gold, a Beijing-based gold trading firm, says 50 percent of the gold bought in China as an investment is in physical form, meaning gold bars and jewellery, while the other half is invested in gold markets.　

He adds that global gold markets are likely to be affected by Chinese sales during the Spring Festival, though it is hard to quantify accurately.　

"Because gold products are the biggest sellers on the Chinese gold market at this time of the year, this kind of buying power will influence the world gold markets to some extent. However, how much the influence will be is still difficult to measure with any accurate numbers."

According to the World Gold Council, one out every eight ounces of gold sold in the world is bought by Chinese consumers.

Many analysts expect domestic gold consumption to rise in 2010 because of China's rapid development and continued GDP growth.