The Chinese woman in her 50s wore no fancy jewelry or other accessories. But there she was buying gold.
"It's a present for my first grandchild who'll be born next month," she said.
In early February, the woman took a break from her work at a logistics company in Shanghai and headed to a nearby branch of ICBC bank to buy a 50-gram gold bar. It cost 18,200 yuan ($2,700 or 220,000 yen).
After completing a simple transaction at the bank counter, she was handed a gold-colored box containing the gold, guaranteed as having 99.99 percent purity.
"Gold is good. It could go up in value a lot more," the woman said.
With cash, once it is used, it is gone. Her grandchild will one day be told that the gold bar was given to mark his or her birth. For the woman, this was a pleasing thought.
She hopes that if her grandchild is short of money in the future, the gold bar will fetch more than its purchase price.
According to the World Gold Council (WGC), a research organization created with funding from major gold mining companies, demand for gold is greatest in India, where purchases of jewelry, coins and gold bars amounted to 933 tons in 2011. China also has burgeoning demand and could overtake India for the No. 1 spot.
In 2011, the volume of gold purchased by Chinese rose by 20 percent to 799 tons. The WGC expects this figure to double over the next 10 years as the affluent middle class continues to emerge.
"Gold has long been a welcome gift, but today the number of people purchasing it as an investment has increased," explains Zhang Wanjing, 27, an employee of the bank where the grandmother-to-be bought the miniature gold bar. "Money that would otherwise be underutilized is now being channeled into gold."
The Shanghai composite stock price index is hovering at a level equivalent to around one-third of what it was in 2007.
The government has clamped down on the real estate market, which was on the verge of a bubble, by introducing measures to prevent people from buying more than two properties, thus stymieing speculators.
In addition, the consumer price index for 2011 chalked up 5.4 percent higher growth than the previous year, and its highest level in three years.
Depositing money in an ordinary bank account with interest rates close to zero only causes savings to shrink.
This explains the explosive popularity of gold, for which the yuan price has risen fourfold over the last 10 years.
The ICBC's Gold Accumulation Plan, in which a set sum is invested in gold every month, has already spawned 2 million accounts around the country. When an account balance reaches 20 grams (around 90,000 yen), it can be exchanged for actual gold.
A 50-centimeter square attache case lies next to the bank teller's seat. Inside are bars of gold ranging in weight from 20 grams to 1 kilogram that have been sealed in plastic blister packs like pills. When an order is received, they are torn from the pack, placed in a box, and handed to the customer.
It seems like rather casual treatment for such a valuable commodity.
In January 2011, Shanghai architect Shen Yangsheng, 27, spent 16,000 yuan, a third of his bonus, to purchase 50 grams of gold at an established precious metals store. If he were to sell it now, he would make a profit of 1,500 yuan. This equates to over 9 percent in interest, far better than the approximately 4 percent return offered by government bonds. He is waiting for the right time to sell.
"I'm planning on getting married this year, so I want to use the money on improvements for our new home."
Financial transactions have only recently been liberalized in China. The Shanghai Gold Exchange was established in 2002. Its total transactions for 2011 amounted to 7,438 tons, with a value of 2.47 trillion yuan (around 29.64 trillion yen).
"We're No. 1 in the world in terms of spot transaction value," says the exchange's Gu Fenshuo proudly. It is now possible to make late-night transactions until 2:30 a.m., and there are plans to increase its staff of over 60 to nearly 100 within the year.
There is also the "exchange risk" of buying gold in yuan. As it is an international product for which price movements are mostly measured in U.S. dollars, if the yuan increases in value against the greenback, the gains from an appreciation in the price of gold would amount to less in renminbi than in dollars.
However, a female sales clerk at venerable Shanghai precious metals vendor Laofengxiang says, "Not many people who purchase gold have that depth of understanding."
An employee of a nationally owned bank had this to say: "Chinese have a penchant for new things, so if the price of gold drops, in a few years time they might start investing in other things, such as jade."
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