The gold rush returns - pre-sales of gold bars marking the new
Chinese lunar year are already sizzling before they are due to hit
the counter today.
The bars are scheduled to go on sale today in Beijing, which has
an allotment of one ton among total nationwide sales of three tons.
Sales to retail buyers in Shanghai are scheduled to start this
weekend.
The issuer - China Gold Coin Inc, the country's sole wholesaler
of gold bars and coins - plans to sell 300 kilograms to 500
kilograms of the bars in Shanghai and in neighboring provinces of
Zhejiang and Jiangsu.
The bullions, each marked with a rat to denote next year's
animal symbol according to the Chinese lunar calendar, will be sold
by weight of 50, 100, 200, 500 and 1,000 grams.
"Sales are quite hot," said Shanghai Gold Coin Investment Co, a
subsidiary of China Gold Coin which sells the gold bars.
The company said some regular buyers have already booked their
pieces.
Six years ago, China Gold Coin became the country's first
producer of investment-grade gold bars. Every time the bullions hit
the market, they were sold out quickly due to the traditional view
of gold as a safe haven and alternative investment option.
The bars are also sold with a buy-back guarantee, with prices
based on gold prices in local and international markets plus a
two-percent commission.
On seeing the lucrative market, lots of jewelers and commercial
banks also launched gold bars, some of which can't be sold back to
issuers.
The bars glitter as an investment alternative with the current
state of the stock market, which is undergoing a correction,
soaring property prices and relatively low bank interest rates for
deposit accounts.
The benchmark Shanghai Composite Index has tumbled 11 percent
this month, although the index has also doubled this year.
Investors are concerned that the short-term correction will
continue, although analysts say the long-term bull run is far from
ending.
Gold stands out when investors are seeking investment
alternatives especially when inflationary pressure is high. China's
consumer price index, the main gauge of inflation, rose 6.5 percent
in October.
Few people have sold back the bullions to the issuer even though
gold prices have almost doubled since the bars were first launched
in the Year of the Goat.
"More buyers see the bullions as a long-term investment and as
collections rather than a means to cash in short-term profits,"
China Gold Coin said.
(Shanghai Daily November 22, 2007)
