Tag Archives: chinese gold

The Celebration of Chinese New Year

Chinese New Year is probably the most important date in the Chinese calendar, with the event being celebrated throughout China and in Chinese communities around the world. Gold plays an essential part of the Chinese New Year celebrations.

Also known as Lunar New Year, the date on which Chinese New Year falls each year is variable since it follows the Lunisolar calendar, hence the New Year festival is a movable event. However, Chinese New Year usually falls somewhere between 21 January and 21 February and the date is calculated based on the occurrence of a new moon.

This year, Chinese New Year is on Friday 16 February and marks the beginning of ‘Year of the Dog’ and the completion of the preceding ‘Year of the Rooster’. The Chinese calendar follows a 12-year repeating cycle and is also associated with 12 animals of the Zodiac (Sheng Xiao), with each year in the cycle represented by a different animal. The Year of the Dog is the 11th year in the Zodiac cycle. Next year in 2019, Chinese New Year falls on 5 February, and marks the beginning of the 'Year of the Pig', the final year of the cycle.

The 12 animals of the Chinese Zodiac (Sheng Xiao)

People born in the upcoming Year of the Dog are said to be loyal, honest and friendly with a sense of responsibility as well as being intelligent, independent and decisive. And across China, dogs are also considered auspicious and associated with good fortune.

New Year's Day in China also marks the beginning of the Spring Festival. During Spring Festival, there is a 7 day public holiday across mainland China, beginning on Lunar New Year’s Eve and ending on the 6th day of the new lunar year. This year, the New Year public holiday starts on 15 February and lasts until 21 February. The actual Spring Festival then continues and runs up to the 15th day of the new lunar month which coincides with the traditional Lantern Festival. This year the Lantern Festival is on Friday 2 March.

Customs and Traditions across the Spring Festival

Chinese New Year celebrations are predominantly associated with the colour red. Red is traditionally thought to bring good luck and good future while scaring away evil and bad fortune. This tradition is associated with the story of a mythological beast Nian which in Chinese folklore was scared off by the use of red items and loud noises. Hence New Year’s celebrations incorporate red bunting, red hanging lanterns, dragon dances and loud displays of fire crackers, and its also common in China to see red cloths hanging at the entrances to houses during New Year’s festivities. Wearing red clothes is also popular over the festival and is thought to bring good luck.

In China, the New Year festivities incorporate various customs and traditions symbolising the renewal of a new year, the passing of an old year, and the cultivation of good luck. In the week before New Year, people traditionally clean their houses as a way of cleaning out the old. New Year is also a popular time to purchase new items as it signifies a new beginning and the welcoming of a new year.

The gifting of money-filled red envelopes is also popular during New Year across China. These gifts are thought to bring good luck to the recipient, hence they are known as lucky red envelopes. An amount containing the number 8 is particularly auspicious as the number 8 is thought to be lucky and bring prosperity. But apart from the money, the red colour of the envelope is also associated with good fortune.

Reunion Dinner is one of the most important family occasions in the Chinese calendar

The days leading up to New Year are a time of immense travel within China with millions of people on the move as they return home to their families and relatives to celebrate. A particularly important event during this time is the traditional ‘Reunion Dinner’ which takes place on New Year's Eve, and is a traditional dinner celebrated together with family.

Gift Giving for Chinese New Year

Chinese New Year is also one of the most popular times in China for buying physical gold, gold for gift giving, but also for investment given that it's an auspicious time of the year. At the retail level, Chinese gold demand at this time of year sees a noticeable peak as people across China rush to buy gold bars and buy gold coins, especially for gifting.

This is particularly true of gold coins and gold bars with a Lunar New Year theme, a Zodiac animal theme, or that have an association with China. At BullionStar, we have a wide selection of gold coins and gold bars which would make impressive gifts for Chinese New Year for both family and friends.

PAMP Lunar Series 2018 Year of the Dog Gold Bars

Swiss gold refinery PAMP is one of the best known and most prestigious gold bar brands on the market and is especially popular across Asia. This year PAMP celebrates  the 'Year of the Dog'  with a beautifully designed high relief gold bar portraying a dog motif on both the front and the reverse of the bar's surface. These Lunar gold bars are ideal for gifting and for celebrating the good fortune associated with Chinese New Year.

Available in both 100 gram and 1 ounce weights, PAMP's Lunar minted gold bars contain .9999 pure gold and capture the dog's symbolic qualities of loyalty and friendship. The intricate design on the front face features a portrait of an adult dog sitting in front of a kennel. The reverse of each Lunar gold bar cleverly reveals, through a reverse angle of the same scene, a puppy in the kennel sheltered behind the parent dog.

The bars reverse face is also embossed with PAMP’s refinery logo, the weight and purity of the bar, the bar’s unique serial number, and the Swiss assay mark and guarantee of authenticity Essayeur Fondeur.

PAMP Suisse 2018 Year of the Dog Gold Bar

Each PAMP Lunar gold bar comes in a distinctive and secure assay card

Royal Canadian Mint MapleGram 8

The MapleGram 8 from the Royal Canadian Mint is a particularly stylish set of 8 Maple Leaf gold coins presented within an attractive red and gold display card and designed around a Chinese New Year theme. Each of the 8 gold Maple Leaf coins weighs 1 gram and contains 9999 fine gold. Each of the 8 coins in the set also has its own unique 8 digit serial number. The red and gold design of the MapleGram 8 signifies luck and good fortune, while the presence of 8 coins references the auspiciousness of the number 8 in Chinese culture.

MapleGram 8 from the Royal Canadian Mint

Perth Mint Gold Lunar 2018 - Year of the Dog

Another attractive gift option for Chinese New Year are the very popular Lunar themed bullion coins from Australia’s Perth Mint, which for 2018 celebrate the Year of the Dog. These coins are the 11th in the Perth Mint’s current series of Lunar bullion coins.

The Perth Mint’s 2018 Gold Lunar coin is available in 6 weight denominations, namely 2 oz, 1 oz, 0.5 oz, 0.25 oz, 0.1 oz and 0.005 oz, each of which is minted from 0.9999 fine gold. The 1 oz 2018 Gold Lunar has a maximum mintage of 30,000 pieces. The reverse of the Lunar gold coin features a stylish and detailed image of a Labrador Retriever with the Chinese character for "Dog", and "Year of the Dog" is a circular inscription underneath.

Perth Mint Lunar gold coin 2018 - Year of the Dog

Perth Mint Lunar Silver 2018 - Year of the Dog

Also in celebration of Chinese New Year, the Perth Mint has produced a 2018 'Year of the Dog' Silver Lunar coin available in weight denominations of 0.5 oz, 1 oz, 2 oz, 5 oz, 10 oz, and 1 kg, all of which contains 99.99% silver and have a superior finish. The reverse of the 2018 Silver lunar celebrates the new Zodiac with a handsome portrayal of a German Shepherd dog and pup. The coin also displays the Chinese character for "Dog", with a circular inscription underneath of "Year of the Dog". While gold is more popular for gifting at New Year in China, silver coins, especially the bigger ones such as the 1 kg Silver Lunar for 2018, can also be gifted.

In addition, the Perth Mint has also released a Year of the Dog 1 oz proof version of the 2018 Silver Lunar which comes in its own box with a certificate of authenticity, and a Year of the Dog 1 oz proof high relief 2018 Silver Lunar also with its own box and certificate of authenticity.

China Gold Panda Coins

In terms of gold bullion and China, Chinese Panda gold coins are undoubtedly the most famous Chinese gold product on the international market, and would make interesting gift ideas for Chinese New Year. Minted in China by Shenzhen Guobao Mint, this Mint is part of China Gold Coin Corporation, which in turn is owned by the Chinese State.

30 gram Chinese Gold Panda coin 2018 - Year of the Dog

Each year the design on Chinese Gold Panda coins changes, with the reverse of the new 2018 coin featuring a powerful portrait of a Giant Panda feeding on a bamboo shoot. The front of each Gold Panda coin features imagery of the Hall of Prayer for Abundant Harvests in the Temple of Heaven in Beijing.

Gold Panda coins are produced in 5 weight denominations ranging from the flagship 30 gram Gold Panda coin, through to Gold Panda coins weighing 15 grams, 8 grams, 3 grams and down to a 1 gram gold coin. The 30 gram Gold Panda coin, weighing the equivalent of 0.965 troy ounces, is always a popular seller and would make a New Year’s gift to remember. Given that 8 is the luckiest number in China and is associated with prosperity and good fortune, the 8 gram Gold Panda coin is also of interest during the New Year festival.

Heraeus 1 kg Silver Lunar Stacker Bar

The Year of the Dog is also celebrated in a new 1 kg Silver Lunar Stacker Bar from the world-famous Heraeus precious metal refinery in Germany. Each of these 1 kg (32.15 ozs) Heraeus Silver Lunar bars contains 99.9% pure silver and has the words “2018 Year of the Dog” embossed on the bar's front surface along with the bar's weight and fineness “1 Kilo” and “999 FINE SILVER” which encircles a stylised representation of a dog.

Heraeus 1 kg Silver Stacker Bar 2018 - Year of the Dog

The reverse of each of these silver bars features an anti-forgery swirl pattern design for added security, and displays the bar's unique serial number. The Heraeus Silver Stacker bar is designed for easy storage and comprises rectangular beveled surfaces that interlock for ease of stacking.

1 oz Silver Happy Chinese New Year - Lion Dance

Also of interest for Chinese New Year is a 1 oz proof silver “Happy Chinese New Year - Lion Dance” coin produced by Victoria Mint on behalf of the Republic of Chad. The silver coin’s reverse features a colorized depiction of a traditional Chinese Lion dance which is synonymous with good luck and fortune, and the Chinese characters ‘新年快樂’ meaning ‘Happy New Year’. This proof silver coin has been produced by the Mint in a very limited issue of just 1000 coins. Each coin comes with a certificate of authenticity and is presented in a red velvet casing and outer box.

The Chinese Gold Market Essentials

A series of eight articles covering the Chinese Gold Market has recently been added to BullionStar’s Gold University portal. This series is titled “Chinese Gold Market Essentials”. Links to all 8 articles can be found on the left-hand frame of the Gold University pages under Research on the BullionStar desktop site, and under the “Chinese Gold Essentials” section of the Gold University, under Research on the BullionStar mobile site.

These new Gold University articles draw on both information from BullionStar analyst Koos Jansen’s Chinese gold market blogs as well as new material. The eight articles in the series follow the style and format of all other articles within the BullionStar Gold University pages. i.e. to be a reference resource for all who are interested in the global gold markets, be they industry participants, reporters and journalists, precious metals investors, or indeed general readers.

The framework for the “Chinese Gold Market Essentials” series centres around the Supply - Demand equation of the Chinese Gold Market and the infrastructure of this market.

The article “Mechanics of the Chinese Domestic Gold Market” explains the core concepts of the Chinese gold market and the central function that the Shanghai Gold Exchange (SGE) plays as the market allocation mechanism within the Chinese gold market. By design, nearly all gold in China flows through the SGE trading and vaulting network, and gold withdrawals from the SGE are therefore a suitable proxy for Chinese wholesale gold demand. This wholesale gold demand includes consumer gold demand and direct purchases of gold on the SGE (institutional gold demand). Wholesale gold demand is therefore a far broader measure of gold demand than just the consumer demand which precious metals consultancies such as GFMS and the World Gold Council report on.

There is therefore a simple and elegant gold supply-demand equation at the heart of the Chinese gold market.

Two other articles in the series address the supply side of the Chinese gold market, each of which focuses on one of the two large components of gold supply in China, namely gold imports and gold mining production.

In 2016, China net imported about 1300 tonnes of gold, making gold imports the largest single source of supply to the Chinese gold market. The article “Chinese Cross-Border Trade Rules on Gold” discusses these gold imports, and the rules around importing gold into and exporting gold from China.

Although Chinese cross-border trade rules on gold apply to both gold imports and gold exports, gold flows mostly into China, and not out again, due to the general prohibition on gold exports. Rules on gold imports are also strict and are administered by the People’s Bank of China, which issues gold import licences to the small number of authorised domestic and foreign banks. Some Chinese mining companies now also import their own gold directly into China.

As regards mining, China is also the world’s top gold producing country, with Chinese mines producing over 450 tonnes of gold output during 2016. Gold mining output is therefore the second largest source of gold flowing into the Chinese gold market. The article “Chinese Gold Mining as a Source of Gold Supply” provides an overview of the Chinese gold mining industry, and profiles some of the larger domestic gold mining companies in this sector.

The gold mining supply article also looks at the fact that China now claims to have over 12,100 tonnes of in-ground identified gold reserves that can be mined in future, and that there are even regiments of the Chinese army which specialise in surveying and exploring for gold across China.

Gold Demand within the Chinese Gold Market” expands on the idea that Chinese gold demand is not just consumer gold demand (jewellery demand, coin and bar demand, and industrial demand) but includes substantial direct purchases of gold at the Shanghai Gold Exchange. Chinese commercial banks also hold gold on their balance sheets to cover a number of activities such as gold accumulation plans, gold leasing etc.

The article “Infrastructure of the Shanghai Gold Exchange” looks at the trading mechanisms and contracts of the Shanghai Gold Exchange. The SGE is the world’s largest physical gold exchange, an exchange in which real physical gold stored in the exchange’s vaults changes hands between trading participants via exchange traded contracts. All trading is conducted on an electronic trading platform, and counterparties are required to have the full amount of gold and cash before trading. Gold contracts traded and cleared on the SGE are known as the SGE’s ‘Price matching’ market.

Gold contracts traded bilaterally off Exchange (i.e. traded Over-the-Counter between counterparties) can also be entered into the SGE trading platform and then cleared through the SGE’s clearing and vaulting system. This is known as the SGE’s “Price Inquiry” market. Additionally, a twice daily gold price auction, known as the Shanghai Gold Price Benchmark auction, is a distinct third spoke of trading on the SGE.

There are 8 physical gold product contracts traded on the SGE representing gold bars and gold ingots ranging in weight from 50 grams through 1 kg and up to 12.5 kgs. Five of these products trade on the Main Board of the Exchange (domestic), and a further 3 trade on the Shanghai International Gold Exchange ( International Board).

A specific article in the series covers the "Shanghai International Gold Exchange". Sometimes known as the SGE International Board or SGEI, this international board is an internationally focused physical gold trading platform launched by the SGE in September 2014. This platform offers 3 Renminbi-denominated physical gold contracts, one of which, the iAu99.99, sees significant trading volume. The aims of the International Board include boosting internationalization of the Chinese Yuan, introduction of offshore Yuan to SGE trading, and internationalizing the membership of the SGE.

The SGEI also has a designated gold vault in the Shanghai Free Trade Zone. Gold imported to this vault remains outside the domestic Chinese gold market. Both domestic and international members of the SGE can trade the International Board contracts in either onshore or offshore Yuan, which as a stated aim of the Chinese authorities, supports the internationalization of the Chinese currency.

The official gold reserves of the Chinese State (monetary gold) are held by China’s central bank, the People’s Bank of China. Currently, these gold reserves are claimed (by the Chinese State) to be in the region of 1840 tonnes. However, the real level of Chinese State gold holdings may be significantly higher than official published figures suggest. The article “PBoC Gold Purchases: Secretive Accumulation on the International Market” presents evidence that the Chinese State purchases monetary gold on the international market including in the London gold market, and ships this gold back to Beijing. It also looks at the possibility that the Chinese central bank may be buying up to 500 tonnes of gold per year and that it may have in the region of 4000 tonnes to 5000 tonnes of gold in its 'real' gold reserves.

The Value Added Tax (VAT) system in the Chinese gold market exerts an important influence on both gold imports and the types of gold that flow to and through the Shanghai Gold Exchange. The article "Value Added Tax (VAT) in the Chinese Gold Market"  looks at the general VAT system in China and on gold specifically, and the types of VAT receipts generated on gold transactions. It also explains when imported gold is exempt from VAT and how 'Standard' gold sold on the SGE is VAT exempt. Standard gold is gold bars or gold ingots of 50 gram, 100 gram, 1 kilogram, 3 kilogram or 12.5 kilogram form, with a fineness (gold purity) of 9999, 9995, 999 or 995.