Gold Is Booming Among China's Young. The Gold Beans.

China's gold market, which accounts for about a fifth of global sales, used to attract an older crowd. Many buyers were middle-aged women looking to add to their nest-eggs or buy chunky bracelets.

But these days Chinese gold shops regularly serve customers in their 20s. Xiaohongshu, a social-media site favoured by "Generation Z" (those born between 1997 and 2012), is buzzing with talk of the precious metal.

Young people don't have much spare cash. The youth-unemployment rate in cities is about 15%. Many companies are cutting salaries. So youngsters are hoping to make the most of what little savings they have. But traditional investments aren't doing well.

The stockmarket is slumping and house prices have fallen for ten months in a row. The international price of gold, though, is soaring. It stood at US$2320 per ounce on April 24th, 2024, up 12% since the start of the year.

Customers elsewhere are buying because of inflation fears (China doesn't have this problem) and geopolitical concerns. Another big reason for increased demand is China's central bank. It has been purchasing gold to diversify its holdings away from dollars amid tensions with America.

Most young people cannot afford to buy gold by the bar. So they are buying it by the bean instead. Weighing about a gram, the beans can be picked up for about 600 yuan (US$80) from banks and jewellers.

In videos on social media gold bugs shake glass piggy banks containing their collections. "The clitter-clatter fills me with a sense of accomplishment," says one. "I can save beans until I retire."

Gold jewellery is also increasingly popular as a luxury good that, unlike handbags or shoes, might increase in value.

"You feel like you're spending money without spending money," one enthusiast told local media. Young women are snapping up "China chic" designs, which feature national symbols, says a salesman in Beijing. Some companies have started embossing their products with Japanese cartoon characters that were popular in the 1990s.

Inexperienced gold bugs, though, are easy to take advantage of. Many young people complain that their beans have been adulterated with other metals or shaved to weigh less than advertised. Buyers should blowtorch their gold to check its purity, say online influencers. Just be careful not to melt your savings.