Chinese Banks Struggle to Meet Surging Gold Demand Amid Economic Uncertainty
Chinese banks are experiencing a shortage of gold products as retail investors turn to the precious metal as a hedge against economic instability. Rising gold prices, coupled with concerns over macroeconomic conditions and potential trade tensions, have fueled a surge in demand for physical gold, leaving many banks unable to keep up with supply.
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Banks Run Out of Gold Bars as Demand Surges
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According to a report from Yicai, several major Chinese banks have sold out of popular gold products, particularly those designed for retail investors. The Industrial and Commercial Bank of China (ICBC) has exhausted its inventory of Ruyi gold bars in various sizes, including 5g, 20g, 50g, 100g, and 200g, with only limited stock of 10g bars remaining.
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Other leading banks are also struggling to maintain supply. The Agricultural Bank of China has run out of its 10g and 20g Chuan Shi Zhi Bao gold bars, while its larger 100g and 200g bars are in limited supply. Similarly, the China Construction Bank is only able to offer its higher-priced 50g and 100g bars. Meanwhile, the Postal Savings Bank of China and Bank of China have restricted their gold sales to preorders due to overwhelming demand.
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Retail Gold Stores Also Face Supply Challenges
The gold shortage is not limited to banks. Retail gold stores have reported similar supply constraints, with many running out of their most popular gold products. One retailer told Yicai that their 100g gold bars were completely sold out before the Chinese New Year, leaving only smaller denominations available.
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Economic Concerns Drive Investors to Gold
The renewed interest in gold stems from its historical role as a ‘safe-haven’ asset during times of economic uncertainty. The ongoing rise in gold prices reflects investor fears surrounding potential trade tensions, particularly as policies advocating for reciprocal tariffs gain traction in the U.S.
The World Gold Council has also highlighted gold’s resilience during geopolitical and economic turbulence. Louise Street, a senior market analyst at the organization, recently emphasized that these factors will likely persist throughout the year, further strengthening demand for gold as a store of value and hedge against financial risk.
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Outlook: Will Gold Demand Continue to Rise?
As global uncertainties persist, Chinese retail investors appear increasingly inclined to diversify their holdings with gold. If the current economic climate continues to fuel concerns over market stability, demand for physical gold could remain elevated, posing additional challenges for banks and retailers trying to keep up with supply.
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While gold remains a preferred safeguard in uncertain times, the ability of financial institutions to restock inventory will be crucial in determining whether Chinese investors can continue accessing this traditional asset for wealth preservation. The coming months will reveal whether this trend sustains or if gold prices stabilize as economic conditions evolve.
