Chinese celebrate Year of the Dragon with gold

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China celebrated its New Year on Jan 23, with celebrations and fireworks to welcome the Year of the Dragon. The dragon is supposed to bring luck in wealth so gold has become a popular commodity in China.
A report in the Financial Times says that China overtook India as the world’s biggest gold jewellery buyers in late 2011. Traditionally, the new year means the giving of gifts but as the dragon, the only mythical animal in the Chinese zodiac, is associated with wealth, this year many people are giving gold instead of the more traditional gifts. The Financial Times report says

” Rising incomes in China have fuelled consumer spending on luxury items. Buyers look to gold as a more durable store of value at a time when other investment options in the country are extremely limited.”

Trading in gold rose by 8% in the last three weeks leading up to the New Year celebrations according to Financial News. The paper says

“Gold historically performs well in troubled times as investors perceive the precious metal as a safe haven, but analysts attributed the recent rise to the pending Chinese New Year. Gold is bought for decorations and gifts for the New Year and Chinese demand has helped boost prices, analysts said.”

The Daily Mail reports that the exclusive London store, Harrods, has produced special gold bars with the dragon motif imprinted on it especially for their Chinese customers. Many more Chinese are able to travel abroad and are doing so to celebrate the New Year. The Daily Mail says that the high end shops of Bond Street have hired Mandarin speaking staff to cope with the expected influx, especially Burberry’s who are expecting a large number of Chinese customers wishing to buy similar clothes to those worn by the Duchess of Cambridge.
According to the BBC, many Chinese families will be trying especially hard to have a baby during the year of the Dragon as it is considered to be especially lucky for a child to be born in a Dragon year.
Whether the Year of the Dragon will prove especially lucky for China remains to be seen, but no-one is taking any chances making sure that the gold markets will remain buoyant for the next two weeks at least.