The Year of the Dragon Lunar New Year holiday not only ushered a new and magnificent year for China but also gave a new record gold buying among the Chinese.

According to data released by China's Beijing Municipal Commission of Commerce, the demand and sales volume for precious metals and jewelry during the week-long holiday, which lasted from Jan. 22 to 28, achieved $95.28 million sales, showing a jump of 49.7 per cent over last year's Spring Festival.

At Caibai alone, one of Beijing's best-known gold retailers, sales of gold, silver and jewelry soared 57.6 per cent during the week-long holiday, China's Ministry of Commerce (MOC) said.

The gold sales boom mostly focused on customers buying New Year-themed gold bars, gold ingots and other types of Dragon-themed jewelries, state news Xinhua reported.

The year's best-selling precious metals products for the Chinese New Year have two characteristics: the dragon-themed, and the other with rich cultural content and exquisite traditional craftsmanship, the China Economic Net earlier said.

China, the world's second-largest economy, had been encouraging its citizens to buy and hold physical gold, either in jewelry, coins or in bullion bars, in a bid to build financial reserves in assets stronger than the U.S. dollar, euro and other weakening currencies. The country and its government had devised on several marketing campaigns, such as launching a machine similar to an automated teller machine that dispenses actual physical gold and authorizing its central and commercial banks to create and include gold portfolios as part of its services. All these schemes meant to encourage,entice and enable specially the small investors an entry point into the gold market.

"Long treasured by Chinese, gold is no longer owned only by a privileged few, but has become a new investment channel open to all," Guan Qiang, assistant manager at Caibai, said in Xinhua News.

Older generation Chinese used to give out gold gifts mostly for sentimental reasons. But this perception has changed over the years.

"To most Chinese nowadays, gold is more convenient to cash in than other investment instruments. Despite common investment risks, the price of gold is clear and easy to judge," Mr Guan said.

Compared to the stock market or housing sector, considered unpredictable investments, Guan pointed out the Chinese prefers gold for its increasing value as an asset as well as the unlikelihood that it will be affected by inflation.

In December, Zhang Jianhua, Research Bureau director of the People's Bank of China, the country's central bank, said that with the present economic global turmoil, no asset is and could be considered safe. "The only choice to hedge risks is to hold hard currency - gold," he said, noting it is smart strategy to buy on market dips.

"Chinese do not value gold only in only sentimental terms. The precious metal is also expected to maintain or increase its value, as evidenced by the surging investment demand seen around the country," Mr Guan said.

According to data from the World Gold Council, China's total gold demand in 2011 will reach 750 metric tonnes, driven by strong demand for investments in gold and jewelry, which could translate to China easily overtaking India as the world's top gold consumer in the next few years.

The demand for investments in gold and jewelry will continue to climb regardless of the record-high price of gold in the world market. The Shanghai Gold & Jewelry Trade Association expected gold investments to hit 955.2 metric tonnes by 2020, spurred by a growing middle class and a more affluent Chinese society, Xinhua reported.

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