Investing in gold is like watching paint dry

[View this email in your browser]( [Youtube]( [Kitco Metals]( Editor's Picks [@neils_C]( If you are a [gold]( investor and managed to stay awake this week, then congratulations! That was not an easy feat as prices went nowhere fast, consolidating between $2,000 and $2,050 an ounce. Just to ease the tedium, I took to watching paint dry as that was more exciting. With the jokes out of the way, The Kitco News team would like to wish everyone a Happy Lunar New Year. People around the world will be celebrating the Year of the Dragon. The Dragon symbolizes power, good fortune, and strength and is associated with auspicious traits like intelligence, ambition, and charisma. [This holiday is one of the most important in the gold market as many consumers give gifts of gold and silver during New Year celebrations](. According to initial estimates, gold sales ahead of this auspicious holiday have been reasonably robust even as consumers face higher prices. “What we've been hearing from our consultants there is that demand has been pretty strong,” said Rohit Savant, Vice President of Research at the CPM Group, in an interview with Kitco News’ Ernest Hoffman. “I think a lot of that has to do with pent-up demand.” Analysts at UK-based Metals Focus said they also expect the value of sales to be impressive in the current price environment, even if volumes don’t meet last year’s numbers. While gold makes a lovely holiday gift, it's not the only reason Chinese consumers are purchasing gold. Analysts note that Asian investors are buying precious metals to preserve their wealth as the nation’s equity markets have dropped significantly in recent days. “China’s market mayhem has dragged the country’s benchmark CSI 300 equity index down more 30% YTD – wiping out a staggering $6 trillion in market value from its peak reached in 2021,” said Phil Carr, cofounder of GSC Commodity Intelligence, in a recent report. Carr added that his firm sees Chinese investors, households, and financial institutions “piling into Gold at one of the fastest paces seen since the Global Financial Crisis.” It’s not surprising that Chinese consumers have a voracious appetite, as they’re only following their government’s lead:[the People’s Bank of China continues to buy gold](. According to the central bank’s reserve data, it bought 10 tonnes of gold last month alone. PBOC’s purchases have slowed in the last three months; however, the central bank is on the cusp of matching its previous gold binge. Between June 2015 and October 2016, China bought 184 tonnes of gold, only skipping one month during that 16-month period. China continues to assert its dominance in the precious metals markets and remains one key factor supporting prices above $2,000. Although there are solid pillars of strength in the gold market, many analysts are not expecting to see any significant rally anytime soon. The Federal Reserve’s higher-for-longer monetary policy stance continues to keep Western investors on the sidelines. [At the same time, the rally in equity markets, as the S&P 500 closes the week above 5,000 points, a new record high, is prompting investors to get out of boring trades and put their money to work.]( For now, gold is going nowhere fast, but many analysts are saying that the market is just coiling like a spring that could launch higher when the Federal Reserve starts to cut interest rates. Until then, enjoy watching the paint dry. Have a great weekend. Neils C. 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