Since the beginning of this year, with the rapid rise of international gold prices, domestic gold prices have been rising, and the gold consumer market is hot. During the "May Day" holiday, the reporter visited a number of gold jewelry stores in Beijing and found that many brands launched preferential activities, and customers came to consult and buy gold jewelry in an endless stream.
The consumption of jewelry and gold tends to be rational
The reporter came to the store of Beijing Caishikou Department Store Co., Ltd. in Xicheng District and saw that the jewelry gold counter on the first floor was crowded with customers.
"There were activities during the 'May Day' period, and the gold price has dropped recently, so the overall sales situation is not bad. The salesman told reporters that the price of gold changes every day, and indeed "dissuaded" some consumers, who are currently buying gold jewelry mostly for marriage and self-pleasing needs.
Image source: Visual China
Since March, the international gold price has repeatedly hit record highs, and although there is a pullback at present, the gold price at a historical high has kept some consumers rational. According to data released by the China Gold Association, in the first quarter, the national gold consumption was 308.905 tons, an increase of 5.94% compared to the same period in 2023. Among them, gold jewelry was 183.922 tons, down 3% year-on-year.
The relevant person in charge of the China Gold Association said that in the first quarter of this year, the rapid rise in gold prices, superimposed on factors such as gold jewelry processing fees and high brand premiums, and consumers' wait-and-see sentiment increased, which made gold jewelry consumption suppressed. The high and large fluctuations in gold prices have increased the production and operation risks of gold processing and sales enterprises, wholesale and retail enterprises have been cautious in purchasing, and the cost of raw materials for jewelry processing enterprises has risen.
Wang Lixin, chief executive of the World Gold Council in China, believes that jewellery demand in Q1 fell slightly year-on-year, but it was still above the 10-year average. The traditional golden period for gold jewellery consumption is around the Spring Festival holiday, and the strong performance of gold in the market has also stimulated consumers' motivation to maintain value and save for consumption.
金条金币受青睐
Gold bars and coins with lower premiums and stronger investment attributes are favored by consumers. "Buying gold bars and playing gold jewelry" has become a new choice for many young consumers. Buy gold bars first, and then go to a gold store to process them into jewelry, which only requires a small additional labor fee, which is less expensive than buying gold jewelry directly in a brand store.
The reporter noticed that in addition to the consumers who came to buy gold, there were also many consumers who took old gold jewelry and consulted gold repurchase business in the store. Some consumers said that taking advantage of the high price of gold, they considered cashing out the gold in their hands.
A salesperson sorts out gold jewelry. Photo by Ni Lifang (Xinhua News Agency)
According to data from the China Gold Association, gold bars and coins were consumed 106.323 tonnes in the first quarter, up 26.77% year-on-year. Liu Xiangdong, chief analyst of Dongyuan Investment, said that the rise in consumption of gold bars and coins is related to investors' demand for safe haven when gold prices are high, and the higher attention of physical gold investment.
Wu Dan, a researcher at the Bank of China Research Institute, told reporters that gold jewelry has a beautiful shape and a strong sense of design, and often has a higher processing fee, which means that compared with simple gold bars and gold coins, jewelry gold will have a higher premium. In the context of rising gold prices, residents' investment demand for gold has prevailed, and they are more inclined to buy gold at a low premium to maintain and increase its value, which has led to an increase in the consumption of gold bars and gold coins.
Industry insiders said that in the repurchase business, whether it is gold bars or gold jewellery, the repurchase price is equal to the real-time gold price of the day minus the handling fee, and the handling fee ranges from 2 yuan to 5 yuan per gram, and the gold jewellery may also deduct 1% to 2% of the loss.
At present, the entities that provide gold repurchase business in China include gold jewelry stores, commercial banks, as well as some pawn shops and individual merchants. Liu Xiangdong reminded that consumers must choose regular merchants when participating in the repurchase business, and it is best to go to the store where they purchased it to repurchase, and bring product certificates and purchase vouchers.
The consumption boom is expected to continue
Experts generally believe that although in the short term, the high gold price will inhibit the consumption of jewelry gold, but in the long run, mainland consumers have a greater demand for gold, and the domestic gold consumption boom is expected to continue.
"Gold has many beautiful meanings in the mainland, and it has become a rigid need in scenarios such as marriage and gifts. Wu Dan believes that with the technological innovation of the gold industry, gold jewelry in recent years is more in line with the consumption concept of young people, and products such as small gram weight and national tide are favored, which is expected to boost the consumer demand for gold jewelry.
A customer picks up gold jewelry at a gold shop. Photo by Ni Lifang (Xinhua News Agency)
According to Wang Lixin's analysis, looking forward to the second half of the year, domestic gold retail investment demand may remain at a healthy level. A prudent and appropriate monetary policy in China may lead to a further decline in interest rates, and gold's attractiveness is expected to increase. As central banks around the world continue to buy gold at a record-breaking pace, investor interest in gold is likely to continue to be high.
In the view of market participants, with the growth of demand, the competition in the gold consumer market will also intensify, which will prompt gold processing and sales enterprises to improve product quality and service levels.
Huatai Securities research report shows that under the background of continuous rise in gold prices and consumption differentiation, the high-end gold jewelry consumer market and cost-effective opportunities coexist, both focusing on quality and price are the main characteristics of current jewelry consumers.
Source: Economic Daily