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Mainland Chinese tourists tempted by the plunging price of gold emptied Hong Kong's local banks and jewelry shops over the weekend of the precious metal.
With the price of gold falling 15 percent in 2013 after a steady 12-year climb, hitting a low of $1,321.95 an ounce on April 16, 2013, China has developed a voracious appetite for the metal,gobbling up more than 300 tons of gold [zh] over the course of 10 days, according to local reports.
Demand is so high that the Shanghai Gold Exchange Market had a record breaking exchange of 43 tons of gold in a single day on April 22.
An insider from the investment field revealed that since the drop of gold price on April 12, in 10 days Chinese investors have swallowed up 300 tons of gold, which is like 10% of the annual production of gold worldwide!
Weibo user Anson Feng was in Hong Kong buying gold last weekend and she posted online a photograph of the scene.
His comment prompted much discussion, with some interpreting the frenzy as a sign of domestic crisis or a scheme to draw money out of China.
In Song's comment thread, “Ha Lou” (徽土豆) used traditional Chinese wisdom to explain the phenomena:
People buy all kinds of antiques in times of prosperity, rush for gold when they foresee chaos.
“Zhangnansen 1975″ (盗梦空间里的人) and “Beautiful water in West Lake” (西湖水美) believed that it is related to the failure of the stock market:
“Zhangnansen 1975″: Shi Jianxun [a professor of economics] believes that China's stock market has been left with no value because the privileged classes have turned it into their playground for cashing out money and so ordinary citizens who have been cheated many times still are afraid. Now people have money at hand but there is no where for them to invest. When gold prices drop, they naturally rush for gold.
“Liu Jihan”: The price of a ton of gold is about 280 million yuan (about 45 million US dollars). 300 tons of gold is about 84 billion yuan (about 13.5 billion US dollars). The total bank savings of mainland Chinese residents are more than 18 trillion yuan (2.9137 trillion).
“Future Silver — Xiao Chen” (银在未来-小陈) and “Small reunion” (小团圆92457) predicted that the eventual winners are investors in the U.S:
“Future Silver — Xiao Chen”: The US government and investment banks intend to sell out of gold and silver. Obama met with officials from the Federal Reserve early this month. The Federal Reserve revealed the minutes of the meeting to some institutions and banks, then Goldman Sachs started to forecast that gold price will drop and it drops. This is a trap. The US controls the gold price and we cannot change the trend that in the future 10 years from now, the bull gold market will turn into a bear market and gold prices will continue to drop.