Gold demand is expected to increase in China as economic and geopolitical uncertainties may drive up purchases of safe-haven assets, experts said.

The expectation comes despite forecasts that gold prices may rise further on anticipated US rate cuts early next year, they added.

Spot gold crossed $2,100 per ounce to hit a record high in early Asian trade on Monday, though it dropped to $2,041 on Tuesday.

Benchmark COMEX gold futures surpassed $2,150 per ounce, touching a record high on Monday, but fell to $2,060 at its highest a day later.

"We believe intensifying expectations of major central banks ending their tightening cycle and starting to cut in the first half of 2024, as well as still heightened geopolitical tensions and strong central bank purchases, drove gold prices to a record high," said Roland Wang, CEO of the World Gold Council (China).

"Meanwhile, investors' positioning — inflows into major gold exchange-traded funds and surging COMEX gold futures net longs — was another key contributor," Wang added.

Everbright Securities said a slowdown in the US economic growth rate in 2024 is highly possible and anticipated a rate cut there as well as a weaker greenback next year, which could pave the way for an uptrend in gold prices and gold-related equities. It said gold prices are likely to continue to set records next year.

"In general, a higher gold price is usually discouraging for gold consumption, especially gold jewelry demand. However, as gold prices soared and various uncertainties impacted sentiment, we observed the trend of consumers purchasing gold jewelry products with an investment mindset — and these investments have paid off," Wang said.

"Investment-wise, we see different behaviors, especially gold exchange-traded funds. Chinese investors usually 'buy low and sell high' in the gold ETF market as it is dominated by retail investors. In the United States and Europe, where ETF investors are mostly institutional, they are trend followers," he said.

Wang predicted that robust demand for gold investment, as seen in the first three quarters, will continue.

According to a report released by the WGC on Tuesday, among 218 high net-worth investors whose investable assets exceeded 6 million yuan ($841,449), aged over 40 and with over two years of experience in investment, wealth preservation and security are the primary goals for investments, surpassing wealth appreciation.

About 90 percent of such investors have invested in gold or are willing to invest in the yellow metal, said the report.

"So far in 2023, the country's gold jewelry demand has offset declines in other regions, stabilizing the global gold jewelry demand," said Wang.

China has been the largest gold jewelry consumption market in the world since 2012. Over the past decade, China's gold jewelry demand accounted for 31 percent of the world's total, said the WGC.

"We believe opportunities abound in the future for China's gold market. Constant innovations in the gold jewelry industry have seen a wider variety of products offered to consumers. With young consumers' tastes rapidly changing, the increasing number of gold product choices will ensure gold's dominance in the retail jewelry market," Wang said.

According to the WGC, demand for gold bars and coins in China surged to 82 metric tons in the third quarter despite soaring gold prices, representing the strongest third-quarter performance since 2018.

In the first nine months, China's demand for gold bars and coins reached 197 tons, up 26 percent year-on-year.

China's total demand for gold jewelry reached 481 tons during the same period, up 8 percent year-on-year. The country's inflow of gold ETFs amounted to 8 tons, valued at around $500 million, according to the WGC.

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