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Gold May 10, 2022 04:20:29 PM

WGC Foresees Elevated Chinese Household Savings in 2022

Paul Ploumis
ScrapMonster Author
The WGC expects the willingness of households to save to remain elevated throughout the current year.

WGC Foresees Elevated Chinese Household Savings in 2022

SEATTLE (Scrap Monster): The recent analysis report by the World Gold Council (WGC) highlights gold’s key role as an efficient means of saving for Chinese population. The yellow metal is easily accessible for Chinese investors via both online and offline channels, the trade agency noted.

According to Ray Jia, Senior Analyst, China World Council, the resurgence of Covid-19 and the lockdowns in major cities that followed it has led to households spending less, especially on discretionary items. The Chinese retail sales hit the second worst level in Q1 this year, after the rockbottom levels seen in Q1 2020 during the pandemic time.

The WGC expects the willingness of households to save to remain elevated throughout the current year. These savings could benefit gold as well, although they often tend to be in the form of bank cash deposits. Incidentally, RMB gold has recorded a compounded annual growth rate of 6% over the past fifteen years, significantly higher than any other asset classes including government bonds.

The analysis conducted by the trade body, based on historical data, suggests that gold has the ability to generate long term returns. The yellow metal is likely to perform well in coming days, especially in the midst of higher inflationary pressure and further devaluation of the Chinese yuan, triggered by the clouded economic outlook.

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