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China's gold demand slated to support high prices ahead of Chinese New Year

A report by the World Gold Council about China’s gold jewellery market predicted a robust growth in Q1 2023 for China’s gold jewellery consumption.

January 20, 2023 / 12:54 PM IST

A relaxation in COVID-19 restrictions and the anticipation of higher demand ahead of the Chinese New Year are driving a rise in gold prices in China. Gold prices reached their highest level earlier this week on 17th January after six months as spot gold jumped  to $1,816.69 per ounce by 1:52 p.m. ET (1852 GMT), rising to $1,832.99.

"Gold is following the decisions by China to further ease COVID restrictions," on the anticipation of higher demand from the region and in spite of rising yields," Bob Haberkorn, senior market strategist at brokerage firm RJO Futures told news agency Reuters in an interview.

A report by the World Gold Council on China’s gold market predicts that China’s economic recovery and gold consumption are likely to benefit  from the relaxation of the strict zero-COVID policy.

The report also mentions that local gold consumption is also likely to receive traditional festive boosts from the Chinese New Year’s (CNY) holiday in late January.