After the Spring Festival this year, the price of gold has risen all the way, and it has gradually embarked on the opening of the "golden life". On April 12, the gold price in New York broke through the $2,400 per ounce mark and reached $2,430.70 per ounce. At the retail terminal, the price of gold jewelry once exceeded 700 yuan/gram. However, gold climbed to a high and then gradually declined again, but rebounded again in early May and fell again after May 10. Domestically, after hitting a record high of 588.28 yuan/gram on April 15, Shanghai Gold began a high-level shock trend.
Gold prices continue to be high, how do consumers react to this, and are gold jewelry still the "sweet and sweet" that the public is looking for? Silver Persimmon Finance visited the market business district to find out.
A number of gold jewelry brand stores are on sale
Hangzhou White Horse Jewellery Market (hereinafter referred to as "White Horse Market") is a "paradise" for gold lovers, and the price of gold products here is relatively affordable compared to shopping malls. It may coincide with a working day, and when Silver Persimmon Finance visited, it was found that there were not many customers visiting the market, and some counters were not even patronized, which was a little deserted. Those who come to visit are all gold "loyal fans". Ms. Zhang, who lives in Hangzhou, told Silver Persimmon Finance that she liked gold many years ago and came to patronize it when she had time. "I came over early in the morning to shop, and when I saw what I liked, I immediately took it." Ms. Zhang shook the gold bracelet she had just bought and said.
Near noon on weekdays, in the shopping mall of the business district, Silver Persimmon Finance observed that there were not many people who came to visit the brand's gold jewelry store, but some young people who worked nearby would go here in groups. Many people come by and ask, what is the price of gold now? Although it seems that the flow of people is average, many sales say that "they still buy a lot", but they also say that it cannot be compared with the Chinese New Year.
During the visit, Silver Persimmon Finance noticed that gold jewelry merchants without exception have launched more vigorous promotional means, Mother's Day and "520" promotional posters printed with preferential policies are hung at the door of the store, and many gold jewelry counters are also plastered with discount advertisements.
The staff of Lukfook Jewellery Longhu Xixi Tianjie store said that they have not done such a big event since its opening. She said: "When it opened, I only applied for the activity of deducting 30 yuan, and now the activity is 45 yuan, which is very strong." She laughed and said that the price of gold had probably risen a little too high. Bi Cuiqing, sales of Lukfook Jewellery Intime Department Store (Hangzhou Wulin Main Store), said, "Because of the superposition of '520' on May Day and Mother's Day, this is already the store's biggest discount this year." Bi Cuiqing was also surprised that this year's store can apply for a discount of 52 discounts, she introduced, the general May Day discount is 40, and the rest of the small festivals will be reduced by 20~30 yuan.
Silver Persimmon Finance found that the Saturday Fu Store located in Longhu Xixi Tianjie has launched a big promotion of 128 yuan, and at the same time, the piecework gold can be reduced by 220 yuan if it is over 1,000 yuan. The counter of the Mingpai jewelry store next to it is also pasted with a pink derogation 100 discount promotional banner. In addition, Mingpai Jewelry also launched a 188 yuan, 0.17g gold bead necklace, a red bracelet with a gold ring in the early 200 yuan, etc. "These are our drainage funds, and they are very affordable. I've never seen such a big discount. The sales of Mingpai jewelry told Silver Persimmon Finance.
Gold flows are becoming increasingly slow
Are the big promotions a sign of subdued jewellery consumption? The words of Zheng Baimeng, the owner of the Million Gold Store in Liushi Town, Wenzhou, confirmed this view. Zheng Baimeng, who has been running a "million-dollar gold store" for more than 30 years, told Silver Persimmon Finance that over the years, gold prices have risen and fallen, but gold consumption has been quite ideal, especially in the past two or three years, gold has gradually replaced diamonds as the first choice for wedding "hardware", and many brands have implemented a younger strategy, and gold jewellery consumption has gained momentum. But what Zheng Baimeng didn't expect was that "the turnover in the first quarter of this year fell by 10%~20%." "May Day" such a "peak marriage period" also failed to bring holiday benefits. As far as he knows, there is also the "gold distribution center" Shenzhen Shuibei Market.
According to Xinhua News Agency, at Shenzhen's Shuibei Market, a number of shopkeepers said that the retail and wholesale markets during the May Day period were lighter than after the Spring Festival. "The market is hot after the Spring Festival this year, and some wholesalers' shops are doing so well that they can't even crowd in. After April, the market turnover has declined. Zhengsheng jewelry marketing director Long Lilan said.
Chen Fei (pseudonym), a second-hand luxury goods recycler, has recently started not accepting second-hand gold jewelry, "at most only doing acquaintance business". "The price of gold is too high now, a 100-gram gold bar costs more than 55,000 yuan, and the price given by my consignee is less than before, and I can only make about 500 yuan. Before, it was 20,000 or 30,000 gold bars, and I could earn 1,000 yuan. ”
Chen Fei is familiar with the business of recyclers. After the price of gold rose, there were many people who wanted to ship. Chen Fei said that gold recycling is now increasing in both quantity and price, and before it could collect 120 kilograms a day, now it can reach 20 or 30 kilograms a day. But what is clear is that the pace of payment collection is slowing down. "Before, I sold more than 10 kilograms a day, and after the buyer got the goods, he calculated according to the international gold price of 0.8 yuan to 1 yuan per gram, and the money was sent to you in three to five minutes. Nowadays, the buyer's purchase price is about 2 yuan per gram of the international gold price, and sometimes the money is not available on the same day. ”
Chen Fei believes that they are short of money. "In the past, the monthly turnover transaction of recyclers was more than 100 million yuan per month, but now the turnover transaction is 200 million or 300 million yuan", and the speed of downstream gold recyclers is also slowing down. "The consumption of the end people is not moving, and the major manufacturers are not willing to hoard more gold, which is also one of the reasons for the slowdown of flow."
Profits of many listed companies are under pressure
According to the analysis of the gold-related data report released by the China Gold Association on April 26, 2024, the rapidly rising gold price, combined with factors such as high gold jewelry processing fees and brand premiums, has strengthened consumers' wait-and-see sentiment, which has suppressed gold jewelry consumption to a certain extent, and increased sales pressure on gold jewelry retailers.
The data report also showed that in the first quarter of 2024, 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, a year-on-year decrease of 3.00%.
In fact, it's not just the average consumer whose enthusiasm for gold is declining. On May 7, 2024, the People's Bank of China released data that China's gold reserves as of the end of April 2024 were 72.8 million ounces, compared with 72.74 million ounces at the end of March, an increase of 60,000 ounces. This was the lowest intake since November 2022, with a monthly increase of 160,000oz in March.
Reflected in the performance of A-share listed companies, there are indeed not a few gold and jewelry listed companies whose A-share disclosed their first-quarter performance reports, and there are indeed not a few profits under pressure. For example, Zhou Dasheng (002867. SZ) disclosed the first quarter report of 2024, showing that the company achieved a net profit attributable to the parent company of 341 million yuan during the reporting period, a year-on-year decrease of 6.61%. Mingpai Jewelry(002574. SZ) realized a net profit attributable to the parent company of 20.5286 million yuan, a year-on-year decrease of 55.14%, and a net cash flow from operating activities of -167 million yuan, a year-on-year negative.
The gold price is still bullish
It is worth noting that the data of the China Gold Association mentioned earlier showed that with the rise in gold prices, the consumption of gold jewelry in the country fell in the first quarter, while the consumption of gold bars and coins increased by 26.77%. The World Gold Council's Q1 2024 Gold Demand Trends report shows that global industrial demand for gold increased by 10% year-on-year in Q1 due to the boom in artificial intelligence and increased demand from the electronics industry.
Jin Guoqiang, director of Zhongzhou Futures Research Institute, said in an interview with Silver Persimmon Finance that there are two main reasons for the rise in gold prices: one is investors' expectations of global secondary inflation, and the flow of funds to real assets has increased, prompting gold prices to rise; Another important reason is that due to the impact of factors such as the advancement of the transformation of the global energy structure, the diversification of settlement currencies and the debt problem of the United States, including the freezing of Russia's dollar reserves after the Russia-Ukraine conflict, the safety of the dollar as a reserve currency has been questioned, and the trust of many countries in the dollar has gradually decreased, and the trend of de-dollarization has been strengthened.
Some of the important factors that led to the rise in gold prices are still there, and in the context of the continuation of the main contradictions, Jin Guoqiang believes that gold prices are still worth being optimistic about in the long run.
China Merchants Securities Research Report predicts that the gold price is expected to fluctuate upward in 2024, the terminal consumer demand for gold and jewelry will be under pressure in the short term, and the whole year will be relatively stable, and the industry's prosperity will be slightly inferior to that in 2023, but it is still a better category in optional consumption.