China’s economic recovery from the coronavirus pandemic may offer some solace to gold bulls, with expectations building that jewelry demand will rebound following last year’s wipe out.
Jewelry retailers on the mainland have reported strong sales in recent months, while concerns over infection have pushed some consumers online. It’s a turn around from last year’s Lunar New Year period, when surging virus cases forced stores to shorten business hours and manage time off for employees, and consumers reined in spending.
The shaky start to 2020 saw demand in the world’s biggest gold consumer tumble 35% to the lowest annual total since 2009, despite a rebound in the final three quarters. China’s Lunar New Year holiday, a traditionally auspicious time to buy gold, kicks off on Thursday.
Optimism about new year sales has improved considerably, said Nikos Kavalis, managing director at consultancy Metals Focus. He’s confident sales “will be higher year on year, given the low base in 2020 due to the pandemic.”
Reference: Bloomberg
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