10-year-old girl in China converts New Year cash gifts into gold for 3 years
From 460 to 1,100 yuan per gram... up 139% in three years
A 10-year-old girl in China who has been converting her Lunar New Year cash gifts into gold has recently made a substantial profit thanks to the surge in gold prices, drawing widespread attention. The choice she has stuck with for the past three years has led to an unexpected outcome.
On the 13th (local time), the South China Morning Post (SCMP) in Hong Kong reported that a 10-year-old girl living in Langfang, Hebei Province, China, has been converting all of the cash gifts she received during the Spring Festival (China’s Lunar New Year) into gold for the past three years and keeping them so that her parents could not spend the money.
The girl, who is from Langfang in Hebei Province, has been exchanging the cash gifts in red envelopes that she receives during the Spring Festival for gold for three consecutive years. In China, there is a custom during the Spring Festival where adults give money in red envelopes to children or unmarried family members to wish them good luck and health for the year.
Afraid her parents might spend it... 'Investing in gold' since three years ago
The girl’s mother, Ms. Bai, said her daughter began investing her New Year’s cash gifts in gold in 2023. She explained that the decision was driven by concern that the parents might otherwise spend the money. They chose to accumulate gold instead of holding cash because they judged that gold was better at preserving value than cash.
According to Ms. Bai, the girl receives about 4,000 yuan (approximately 840,000 won) in New Year’s cash gifts each year.
When they first bought gold, the price was about 460 yuan (approximately 97,000 won) per gram. However, as of February this year, the gold price has risen to 1,100 yuan (approximately 230,000 won) per gram. In just three years, the price has increased by about 139%.
International gold price breaks above 5,000 dollars per ounce... Gold prices in China also surge 30% this year alone
The international gold price surpassed 5,000 dollars per ounce for the first time ever on the 26th of last month and has repeatedly hit new record highs, at one point soaring to the 5,600-dollar level. Although it has recently retreated as investors locked in profits, it is still fluctuating around the 5,000-dollar mark.
According to the World Gold Council (WGC), Chinese investors purchased about 432 tons of gold bars and coins last year. This represents a 28% increase from the previous year and accounts for roughly one-third of global purchases in that segment last year. Gold prices in China have also jumped about 60% over the past year, and are reported to have risen an additional 30% or so just since the beginning of this year.
In China, middle-aged women who actively invest in gold are even referred to as the “Dama brigade,” a term likened to “Mrs. Watanabe,” which denotes Japanese retail investors. “Mrs. Watanabe” refers to Japanese individual investors who borrow yen at low interest rates and seek profits by investing in high-yield assets through yen carry trades.
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