"Lower gold prices give an extra boost to demand" as China marks Lunar New Year - Wealth Managers

"The more gold prices drop, the more Chinese aunties buy," one analyst notes

Jan. 31 marks the start of the Lunar New Year holiday in China and much of Asia. The strong gold-buying tradition attached to the holiday has helped give bullion prices a boost this year.

"Jewelry is always one of the favorite choices (in China), and this year is especially robust and busy, just because of how cheap gold prices have actually become over the past three or so months," Bloomberg's David Ingles noted in a Jan. 30 report. 

The Chinese are undeterred by low prices. In fact, they are seasoned bargain hunters who look at any price drops as long-term buying opportunities.
According to Bloomberg, the top jewelers in China only saw their profits increase as prices fell. "An index of the share prices of Chow Tai Fook and four competitors from Hong Kong and the mainland -- Chow Sang Sang Holdings International Ltd., Luk Fook Holdings International Ltd.,Lao Feng Xiang Co. and Zhejiang Ming Jewelry Co. -- climbed 5.9% in the three months through December as gold dropped 9.3%. It fell 1.7% this month while bullion advanced 4.8%."

"Lower gold prices give an extra boost to demand," said Yang Chunyan at Orient Securities Co. in Shanghai. "The gold price and jewelry sales in China move in opposite directions. The more gold prices drop, the more Chinese aunties buy."

However, holiday buying is winding down as the Chinese settle in to mark the Year of the Horse. Unbeknownst to many Westerners, the celebration doesn't last for just one day. "Lunar New Year lasts 15 days," CNN reports, and "this year its last day falls on Valentine's Day."

"Mainland China will virtually shut down for the next seven days," according to CNBC. Thus, with China's markets closed and much of the holiday gold buying already done, the price could see some weakness over the next few days. And that presents the perfect buying opportunity for Westerners who aren't celebrating the Lunar New Year but instead are looking at Feb. 14, Valentine's Day. Why not shower your loved ones with a truly lasting gift: not candy or baubles, but investment-grade gold? Should the price drop beforehand, all the better for the buyer, whether Chinese or American.

More information can be found online at http://www.goldbullionadvisors.com