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Recently, the international gold price has frequently hit record highs, although the gold price has fallen in the past few days, but since April, COMEX gold and London spot gold have risen for 7 days, with a cumulative increase of 4.67% and 5.01% respectively, and from the beginning of the year to April 12, the two have risen by 13.92% and 13.65% respectively.
On April 12, COMEX gold and London spot gold soared to record highs of $2,448.8 per ounce and $2,431.52 per ounce respectively. As of the close of U.S. stocks, gold prices "plunged", COMEX gold futures closed down 0.53% at $2360.2 / ounce, and London spot gold closed down 1.19% at $2344.25 / ounce, both down about $100 from the day's high, with a retracement of nearly 4%.
With the soaring international gold price, the domestic gold price has also hit a new high, and at present, the retail gold jewellery listing price of many domestic gold, silver and jewellery brand stores is between 720 yuan/gram and 730 yuan/gram. However, as the price of gold continues to rise, the soaring price has made consumers "retreat" and have a certain hesitation to buy gold jewelry. Regarding the recent rise in gold prices, many netizens shouted: "I regret not getting on the car", "The price of gold jewelry is too high", "I dare not buy it at this price now." ”
A salesperson at a gold store said, "During this period, the price of gold is one price a day, and in general, it is a small rise or a small fall." Recently, the price of gold has indeed risen too high, and many consumers are waiting, and those who want to buy gold jewelry to get married in the near future have been hesitating when they see that the price of gold has risen too high."
The CITIC Securities research report pointed out that the price of gold has risen significantly since October 2023, which we believe is first related to the increase in the demand for gold purchases by the central bank and the consumption demand for gold, and the abnormal rise in gold prices since March this year may be contributed to gold speculative trading factors.
Looking back at the market demand of the gold industry from the "gold jewelry cold":
-- Fluctuations in domestic gold consumption demand
From the perspective of mainland gold consumption demand, the consumption of gold in mainland China fluctuated from 2017 to 2022. In 2018, the country's gold consumption peaked at 1,151.43 tons; Affected by the epidemic in 2020, the annual gold consumption demand fell to 821 tons, the lowest value in recent years. In 2021, it surged by 36.5% year-on-year to 1,121 tons; In 2022, mainland gold consumption fell again to 1,001.74 tonnes; In the first three quarters of 2023, a total of 835.07 tonnes of gold was consumed.
-- The consumption of gold jewellery has declined
According to the China Gold Association, gold jewellery is the largest consumer market for gold, with gold consumption in the first three quarters of 2023 being 552.04 tonnes, accounting for 66.11%; Gold consumption in the bar and coin segment was 222.37t, accounting for 26.63%; Gold consumption in the industrial and other sectors was 60.66t, accounting for 7.26%.
According to data from the China Gold Association, the consumption of gold jewelry in mainland China fluctuated from 2019 to 2022. In 2020, China's demand for gold jewellery hit a multi-year low due to the pandemic, a weak economy and high gold prices. In 2021, with the economic recovery and the easing of lockdowns, jewellery demand picked up, with gold jewellery consumption rising to 711.29t that year.
In 2022, although the good epidemic prevention and control at the beginning of the year led to a strong recovery in gold jewelry demand, the subsequent epidemic once again dragged down the demand for gold jewelry; In addition, high gold prices in Q4 also weighed on demand for gold jewellery, with mainland gold jewellery consumption falling to 654.32 tonnes for the full year.
In the first three quarters of 2023, gold jewellery consumption was 552.04 tonnes, up 5.72% year-on-year. In the third quarter of 2023, gold prices continued to be at a high level, and the growth rate of gold jewelry consumption slowed down, especially when the gold price fluctuated sharply near the end of September, and the wait-and-see sentiment of gold jewelry consumption increased.
Goldman Sachs believes gold is currently in an "unshakable bull market" and raised its year-end price target for gold to $2,700 from $2,300 per ounce previously. Citi analysts also raised their price targets for gold, raising their price target for gold over the next three months by 9% to $2,400 an ounce.
Huatai Securities said that the global central bank has strengthened the position of gold allocation, and the accumulation of positive factors may promote the gold price to exceed $3,000 per ounce in the future. In 2022-2023, the central bank's large-scale gold purchase demand has gradually replaced the investment demand of gold ETFs and physical gold, and has become the dominant factor affecting the rise of gold prices in the interest rate hike cycle.
Note: This article is for content purposes only and does not constitute any investment advice.
Prospective Economist APP Information Group
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