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Prices of the yellow metal have gained about 11% in the year to date, Business Insider reported.
Despite this, Caibai, a renowned jewelry store in Beijing, China, has seen more and more customers, many of whom have no great wealth and only modest savings, buying gold as a way to safeguard their wealth amid economic uncertainties, as reported by French newspaper Le Monde.
As China struggles to recover from several years of pandemic and reels from a property sector in crisis, gold remains the best safe haven asset for its citizens.
"It's reliable. People think it's the best investment. There was also real estate and the stock market, but today people are hesitant, whereas gold has continued to rise," Wang Anmei, a salesman at Caibai, explained.
The demand for safe havens has pushed China's gold consumption up 5.94% from a year earlier to 308.91 tons in the first quarter of 2024, according to data from the China Gold Association cited by state-owned daily newspaper China Daily.
The gold rush is not only seen among people in China, but its central bank has also been snapping up the precious metal.
According to industry association World Gold Council, the People's Bank of China (PBOC) purchased 225 tons of gold in 2023, the most for a single year since at least 1977.
This also makes PBOC the world's largest institutional buyer of gold, the association said.
The central bank had been snapping up the yellow metal for 18 straight months before pausing last month when spot gold prices hit a record high of $2,449.89 per ounce, official data showed on Friday.
It had actually started to slow purchases in April, when it bought just 1.87 tons of the precious metal, down from 4.98 in March and 12.1 in February.
Nonetheless, it is expected to resume buying the yellow metal once prices ease, industry players said.
"They are just waiting and watching. If prices correct to the US$2,200 per ounce level, they will resume again," David Tait, CEO of the World Gold Council (WGC), told Reuters.
