Since February, the price of gold has soared, hitting a record high. This round of gold price rise has not only discouraged many consumers, but also brought full profit expectations to gold companies. What is the story behind this "gold frenzy"?
Soaring gold prices have pushed consumers back
The high price of gold has put many consumers off from it
On April 14, when the reporter walked into a gold jewelry store in Chengdu, the gold jewelry that had just been placed in the store was priced between 720 yuan and 728 yuan per gram. Compared with the past, this price can be described as "sky-high".
A clerk told reporters that the price of gold has continued to rise in recent months, causing many customers to hesitate to buy gold jewelry. "Before the Chinese New Year, a couple of prospective couples wanted to buy a wedding ring, but felt that the price was too high and had been hesitant to buy it. "
This phenomenon is not unique. The reporter learned in the interview that the soaring gold price is "dissuading" many consumers. According to a researcher in the field of jewellery consumption, jewellery consumption is completely different from gold investment for the average consumer, who is more inclined to see gold jewellery as a consumer product that can be recycled at a discount, and since it is a consumer product, they naturally want to buy it when the price is low. But now, the high price of gold has discouraged many consumers from opting for alternatives such as platinum, or canceling their plans altogether.
A clerk in a brand gold jewelry store told reporters that the peak period of gold consumption is usually around the Chinese New Year, and now in March and April, consumers' enthusiasm for buying has declined, and "there will be fewer customers and transactions". However, she also said that for consumers who are in urgent need of wedding supplies, platinum jewelry will still be considered, because the price of platinum is relatively stable and does not fluctuate as much as gold.
In this regard, Yang Delong, chief economist of Qianhai Open Source Fund, said that the current high gold price may continue for a period of time, because the world's major central banks issue a large amount of currency, increase gold reserves and other factors, are driving the gold price to rise. Even if there is a correction in the future, it will be difficult for the price to fall significantly. This is undoubtedly a negative factor for the gold jewellery consumer market.
Businesses have taken advantage of the opportunity to make huge profits
Concept stocks hit record highs
Although the high price of gold has made many consumers feel that they cannot afford to buy gold jewelry, it is undoubtedly a great time for gold companies.
In the latest trading day, A-share gold concept stocks were active again, and the sector index ushered in ten consecutive yangs, with a cumulative increase of nearly 20% since the beginning of this year, and some single stocks even soared by 40%. Among them, Pengxin Resources, Laishen Tongling has a daily limit for 9 consecutive trading days, and Mancaron, Chifeng Gold, Yintai Gold, CICC Gold, Shandong Gold, etc. have all risen greatly.
Behind this encouraging performance is the continued rise in the price of gold. Taking Shandong Gold as an example, the company expects to achieve a net profit attributable to the owners of the parent company of 650 million yuan to 750 million yuan in the first quarter of this year, an increase of 48.11% to 70.9% year-on-year. In the earnings forecast, the company said that the continued rise in gold prices was the main driver of profit growth.
Similarly, the first-quarter earnings forecasts of Hunan Gold and Yintai Gold also show that the net profit of both companies increased significantly year-on-year, benefiting from the rise in gold prices.
Experts believe that there are several main reasons behind the recent surge in gold prices: first, the current Fed interest rate cut expectations have boosted gold prices; Second, the world's major central banks have issued a large number of currencies and increased their holdings of gold reserves, which are also driving gold prices upward; Third, geopolitical and other uncertainties have increased the market's safe-haven demand for gold. These factors resonated and caused the price of gold to rise.
Netizen: I originally wanted to buy a necklace, but the price has been rising crazy since March 6 and 7, and I haven't bought it yet, but I will ask when I pass by [laughs]
Netizen: It's nothing more than the operation of international and domestic capital, although the value of gold is not small, but it can't be eaten and drunk, for most ordinary people, it only has a value preservation effect, and it is inflated, who buys it?
Judging from the current situation, there is still some room for gold prices to rise in the future. Yang Delong of Qianhai Open Source Fund believes that the continuation of the Fed's interest rate cut cycle and the continued increase in gold reserves by global central banks will continue to push gold prices higher. This means that the performance of gold concept stocks is expected to continue to improve, and the stock prices of related companies are also expected to continue to rise.
Of course, the huge rise in the gold price also comes with some risks. Industry insiders pointed out that if gold prices continue to rise sharply, it may exacerbate the uncertainty of the central bank's policy adjustment, which will cause violent market turmoil and have a certain impact on the real economy. Therefore, investors should also remain vigilant and cautious when chasing gold concept stocks.
Overall, the current surge in gold prices has deterred many consumers and brought huge benefits to gold-related companies. The hidden story behind this "gold frenzy" is worth further exploration.