Gold Rush

For most of the year, gold is a commodity reserved for corrupt, money-laundering businessmen, doe-eyed Lolitas on microblogs and high-flying international investors who have given China its reputation for wealth.

However, Spring Festival ushers in a unique time of the year when even the general public splash out on a bit of bullion to bribe their friends, relatives and colleagues into liking them for another year. Financial markets might wallow in doom and gloom in Europe and the US, but gold continues to shine brighter than ever in China and rides a surge in sales on the cusp of the biggest national holiday.

Dragon fever goes gold

Lately at the Caishikou department store (Caibai) - Beijing's largest gold and jewelry market - mobs of customers have swarmed counters, eagerly rummaging through earrings, bracelets, necklaces and garish statuettes all paying a glittering tribute to the animal of the 2012 Chinese zodiac, the dragon.

"Price hikes don't really affect jewelry, so it's quite a popular choice," said an unnamed staff member at Caibai on Tuesday. "Around this time of the year it's less about investors and more about young couples exchanging gifts, or parents looking to treat their future son-in-laws."

Like any national holiday around the world, Spring Festival heralds a boom in consumerism. It's a time when the bulk of the country's population spends money on lavish celebrations and gifts. Though it's customary to give young children hongbao (red envelopes) filled with cash, it's unseemly to turn up to official banquets without a respectable present.

Dragon memorabilia this year starts from tiny medallions priced around 500 yuan ($79.20), with small bars costing around 1,000 yuan. For those with deeper pockets who don't mind parting with significantly more, ornately carved statues of dragons are also on sale.

Upstairs at the Caibai Mall, a snaking queue of customers undeterred by the prospect of waiting more than hour in line trickled from one popular gold vendor. Despite the queue's length, customers were calm and orderly.

"Naturally, everyone is here to buy gold for the Year of the Dragon," explained a male customer waiting in line. "It's a good time to buy gold now, and increase your luck and fortune for the coming [lunar] year."

Long queues, long-term rewards

The majority of customers told the Global Times they were queuing up for limited edition gold bars embossed with various traditional designs commemorating the Year of the Dragon. Before we were able to get a name from our patient customer, we were ushered away by a member of staff. They don't like people asking questions and no photos are allowed, although that didn't stop us from trying.

Last year saw the highest-ever demand for gold in China, with record quantities of the precious metal imported from Hong Kong around November and December, pushing value to a four-week high last week. Sales of gold and other jewelry topped four billion yuan last year, a 70 percent increase year-on-year. Demand for gold is partly driven by its ease of storage and reputation worldwide as one of the safest investments. Stocks, bonds and China's volatile property market are far more vulnerable to fluctuation, often rising and falling at the same time.

Caught amidst the madness, investor Shi Hua was out last week buying gold bars. Despite the festival rush for trinkets, he believes it makes sense to buy gold early in the year.

"Gold prices are on the rise at the moment," he sagely pointed out. "Spring Festival is actually a pretty good time to be buying because you're almost guaranteed prices will rise again after the holiday. The earlier in the year you buy gold, the more profits you stand to reap later in the year."

Shi echoed sentiments predicted by many major financial publications' editorials that gold will soar to historic highs towards the end of the year, perhaps in part thanks to China's investors. It seems that overexcited customer notions of trinkets bringing a fortune in the New Year may not be unfounded after all.

To sell, or not to sell?

Despite the potential, it's not just shelling out for kitsch mantelpiece and mistress decorations that has taken off before Chinese New Year. Pawnshops and traders also saw an increase in the number of customers looking for an extra bit of cash to see them through the festival.

"We've seen a really obvious increase in people selling their gold recently," said Li Qiang, manager of Beijing Jinma Pawnshop, which specializes in precious metals.

"For us, it is certainly a good sign. Our business increases, as do our potential profits. We've seen some highs over the last year, and I think this year prices are going to continue to skyrocket."

The "lucky" nature supposedly inherent at the beginning of any lunar cycle means that many young couples choose the festival to get married and buy an apartment.

Amongst the middle class, trading-in long held gold investments can fuel the matrimonial and property purchasing surge.

"Most customers come here to source money for a mortgage," said Yang Guxia, manager of Beijing Pulin Pawnshop. "The recent price rise [of gold] has resulted in a lot more people coming in. It's great for us, but I'm not sure it's so wise for investors. From what we've seen, gold could be even more valuable next year."

At the beginning of 2011's Year of the Rabbit, there was an equal rush for gold rabbit-related accessories, which boosted the consumer price index and caused a spike in inflation.