Economic uncertainties push yellow metal to forefront of wealth management
Gold holdings will increase among Chinese high net-worth individuals next year as uncertainties loom in capital markets, experts said, as wealth preservation and security top their asset management priorities.
According to a report released by the World Gold Council earlier this month, among the Chinese affluent, wealth preservation and security exceeded in importance to increasing the value of their wealth.
This is based on a survey of 218 wealthy Chinese with an average personal investable asset of 6 million yuan ($837,670), aged over 40 and with a minimum investment experience of two years.
According to the survey, the majority — 90 percent — have either invested or expressed willingness to invest in the yellow metal, said the report.
Jia Shuchang, a senior analyst from the WGC, said stability is currently the major wealth management purpose, and this has intensified after the COVID-19 pandemic.
The stress on security is reflected by their investment choices.
While cash and savings crowned the list of asset management choices, onshore insurance came in second, followed by A shares and investable properties.
Gold is the fifth most popular asset management option at present, according to the WGC report.
“As a globally accepted asset, gold’s advantages in higher liquidity and risk diversification have increased its appeal to the rich group,” said Jia.
Uncertainties will abound in the capital markets next year, including tightening liquidity, geopolitical conflicts and an increasingly noticeable trend of de-globalization.
Making investment portfolios more defensive will be especially important against this backdrop, he added.
The WGC said gold prices surged nearly 10 percent in 2022 at a time when the benchmark Shanghai Composite Index slid over 15 percent and the renminbi depreciated more than 8 percent.
The bullish performance continued this year, with prices of yuan-denominated gold spiking over 16 percent during the first 10 months of 2023 despite soaring interest rates and aggravated systemic financial risks worldwide.
Both spot and futures prices of the precious metal crossed the $2,100 mark on Dec 4 to hit new highs.
Gold is an effective asset to guard against inflation and risk, according to the high net-worth individuals polled by the WGC, who cited bullion’s hedging function during the 2008 global financial crisis as an example.
A continued expansion in the number of wealthy Chinese will underpin demand for gold, Jia added.
There are 2.11 million households with a net family wealth of at least 10 million yuan in China in 2023, and this is 50,000 more than the statistics compiled a year earlier, according to Hurun Research Institute, a Shanghai-based institution that tracks the affluent.
The average consumer price index for these people had increased 3.9 percent year-on-year by July, as discovered by Hurun, while the national average was a contraction of about 0.3 percent during the same period, said the National Bureau of Statistics.
This indicates the high consumption ability and enthusiasm of wealthy Chinese, which will translate into continued momentum for the country’s economic growth, said Rupert Hoogewerf, founder and chairman of Hurun.
However, stability is a focus area for these high net-worth individuals when it comes to cash planning. Such a conservative attitude may not change significantly in the next three years, he added.
Allocating 6 to 10 percent of their investable assets to gold, the rich group usually considers gold as a long-term investment target, holding it for six to 10 years, according to the WGC.
Physical gold, especially 100-gram and 20-gram gold bars, is especially favored by affluent Chinese, as these are easy to carry and can be converted to cash more quickly.
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, said the WGC.
Meanwhile, China’s total demand for gold jewelry reached 481 tons in the first three quarters, up 8 percent on a yearly basis.
The country’s demand for gold jewelry has offset declines in other regions, stabilizing global gold jewelry demand, said Roland Wang, CEO of WGC (China).
Wealthy Chinese individuals’ interest in gold is in accordance with central banks’ increased holdings of the precious metal.
According to the WGC, central banks worldwide bought a net 800 tons of gold in the first three quarters of 2023, the highest on record for that nine-month period. The net buying is 14 percent higher than during the same period in 2022.
The People’s Bank of China, the country’s central bank, has been the biggest gold purchaser in 2023, according to the WGC.
The Future Fund, Australia’s sovereign wealth fund, said late last year that it will add gold to its portfolio to combat inflation and increase its defensive play.
In December 2022, Russian Direct Investment Fund, Russia’s sovereign wealth fund, raised the limit for gold investment to 40 percent, from the previous ceiling of 20 percent.
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
