During the May Day holiday, the price of gold suddenly plummeted back to the "5 figure", that is, no more than 100 yuan per gram, which is rare. Gold prices are attractive, and there are still very few buyers, with some old brand gold stores saying that this may be the worst May Day in nearly 20 years. This phenomenon has attracted widespread attention and seems to have become a bellwether for the market. What's going on here?
Store managers of brands such as Chow Tai Sang reported that the prices are low, but the customer flow is the lowest in the past 20 years. A store manager said that the turnover during the May Day period was less than half of that of the same period in previous years. This is a huge blow to the gold market. Prices are usually positively correlated with demand, and falling prices should spur an increase in demand.
In recent years, gold's investment attributes are greater than its utility. Many people buy gold more for its function of preserving value and investment, rather than as an ornament for daily wear. The sharp drop in prices has made these investors feel that the market is unstable and are worried about further price declines in the future, so they choose to wait and see.
In China, especially in some large cities, it is very common for older women to buy gold as a means of saving and preserving value. The influence of this group on the gold market should not be underestimated. The plunge doesn't seem to have impressed them. It may be because of the uncertainty of the market, but it may be the impact of the economic environment, which has reduced the disposable income of this part of the population.
Another problem in the gold market is the high processing fees. The price of gold itself has fallen, but the cost of processing remains high, which is why many potential buyers are discouraged. When the price of gold falls, merchants will increase the processing fee accordingly, which will undoubtedly weaken consumers' willingness to buy.
In this market environment, gold merchants and investors are in a wait-and-see mode. Low prices and low market confidence have not increased consumers' willingness to buy. In such a market situation, even large gold brands are feeling unprecedented pressure.
The desertion of the market has also attracted widespread attention from the media and netizens. Some economic commentators have tried to decipher this phenomenon, which could be an important indicator of consumer confidence. Consumers are pessimistic about the economic outlook, and traditional stores of value such as gold struggle to entice them to open their wallets.
The recession in the gold market during the May Day period reflects the plight of an industry and is a microcosm of the confidence of the entire consumer market. Merchants try to attract consumers by cutting prices, and the combination of high processing fees and market uncertainty makes this strategy ineffective.
Judging from the feedback from major gold stores, the customer flow during the May Day period is even worse than that of ordinary weekends. In order to attract customers, the store lowered the price of gold and launched various promotions, but these efforts did not seem to change the overall depression. The store managers were in a heavy mood when they faced the empty shop.
There was also a lot of talk about the collapse of gold prices. Netizens said that the price is attractive, and in the current economic situation, they are more inclined to wait and see rather than risk entering a market that may continue to decline. Netizens mentioned that the actual use value of gold is not high, and most of the time it is affected by speculative factors, which makes the attractiveness of gold as an investment product decline in the current environment.
The sharp drop in gold prices and markets have revealed the cautious attitude of consumers and investors in the current economic environment. Merchants and market analysts alike are closely watching this trend to get more clues about future market movements. The market is currently quite depressed, which may also be a process of self-adjustment.