A salesperson shows Shanghai World Expo Gold Bars in Shanghai. [Yuan Zhou / For China Daily]
Many Wenzhou residents who used to be keen on investing in real estate nationwide have now looked to gold as a new channel to absorb their cash, the National Business Daily (NBD) reported.
"One of my Wenzhou townsmen bought gold worth 14 million yuan ($2.05 million) the other day," said Tao Xingyi, president of Jinding Group, which focuses on gold investment consultancy and high-end gold trading. Tao was born in Zhejiang province's Wenzhou city, which is famous for entrepreneurship.
Tao said the number of customers who came to his company to inquire for gold investment jumped three to four times recently.
Tao added that Wenzhou investors came in groups, with four to five persons in a group at least.
Among these, within just one month three groups came to buy gold. Each took away gold worth more than ten million yuan.
Returns on investment in the stock markets and the real estate market are not good and gold, as a special investment channel and an internationally-accepted currency, can be used to hedge credit and inflation risks, said Yuan Lin, R&D director of the Tianhe Junye Gold Investment Co Ltd.
Tao Xingyi estimated that if the government continues to curb the property market and the stock markets stay bearish, more money will flow into the gold market.
However, it is unable to calculate how much Wenzhou speculators' capital has exited from the property market and then entered the gold market. But, the proportion is quite small, according to several experts interviewed by the NBD.
Gold prices are high, so not many investors will buy in, said Hai Xiao, a gold and currency trading analyst.