Gold prices hit new highs. Spot gold prices climbed from $2,650 an ounce at the start of the week and broke above the $2,700 mark at the end of the week. On Friday, COMEX gold surged 1.07% to close at $2,736.4 an ounce. Since the beginning of this year, COMEX gold has risen by 32.08%.
Retail gold prices of various gold brands also hit new highs. On October 20, a reporter from Company E visited a number of brand gold stores in Shanghai and learned that the retail prices of pure gold jewelry and handicrafts generally exceeded 800 yuan per gram. It was the weekend, and the number of inquiries from various brand stores increased to a certain extent, but the wait-and-see sentiment of customers was strong. Some stores have also launched promotional activities such as "derogations" and discounts on designated goods.
The number of inquiries about "fixed price" jewelry has increased
During the visit, the reporter of Company E learned that at present, the price of pure gold jewelry is generally more than 800 yuan per gram. For example, the price of pure gold of Chow Tai Fook, Saturday Fook, Luk Fook Jewellery and other brands is 806 yuan/gram.
"The price increase brand has arrived in the store, and the price will be changed next Monday." The sales of a Chow Tai Fook store in Pudong New Area, Shanghai, told the reporter of E Company that the price of gold has risen sharply recently, and the number of customers who have come to the store to consult "fixed price" gold jewelry has increased, and related goods have also been placed in a conspicuous position at the door of the store. "It's still cost-effective to buy now, because the price is about to rise." Due to the recent rise in the gold price, the price of the "fixed price" will also be adjusted, the sales said. "For example, the price of this one is 13,000 yuan now, and the price after Monday may be 15,000 yuan." The sales pointed to a "fixed price" enamel craft jewelry in the store.
"The price of jewelry by grammage changes in real time according to the price of gold. Fixed price jewelry includes labor costs, etc., and the frequency of change will be a little lower, and we have to adjust it once every few months. Chow Tai Fook sales said that because the price adjustment is imminent, the sales of "fixed price" jewelry this weekend are relatively good, followed by small gram weight, transfer beads and other jewelry.
The reporter noticed that there was not a lot of customer flow in the stores of various brands, and on the whole, the wait-and-see mood was strong. When a customer heard the clerk introduce the gold price of more than 800 yuan/gram, he left a sentence of "it's so high" and turned away. There are also customers who are choosing gold jewelry for their wedding, "Blame me for not buying it early, and I don't know if it's the right time to buy it now." For such wait-and-see, brand sales usually say to customers that "I don't regret buying now, the more I wait, the more expensive it will be".
Gold stores offer discount promotions
In order to attract customers to the store to spend, many gold stores have launched "derogation" activities. Xie Ruilin's designated gold jewelry in a store in Shanghai is reduced by 60 yuan per gram. "This offer cannot be used in conjunction with other promotional offers and is only applicable to selected items, while stocks last." Xie Ruilin store sales consultant introduced.
The reporter learned that "derogation" is the basic operation of various brand gold stores, and some have launched various discount promotions. For example, Chow Tai Fook also launched a price reduction activity, according to reports, the designated pricing category of gold jewelry deducted 50 yuan, designated pricing category jewelry 6% off. China Gold's Shanghai store also hung up a roll-up banner of the "Jewelry Festival", which read "100 yuan per gram of gold". In order to attract customers to the store, there are also activities such as free mobile phone pendants.
The rise in gold prices has boosted the trade-in of gold jewelry, and most brand stores have launched "trade-in" business. Taking a Chow Tai Fook store in Shanghai as an example, there is no price difference for the replacement of gold jewellery of the same brand, while other brands are recycled at 10% off. "No limit to brand, no limit to gram weight", a store of China Gold Shanghai also has a gold exchange activity. "For consumers, as long as they pay the difference, they can exchange them for new jewelry. In this way, the price is cost-effective, and the effect of use is not much different from that of a new purchase. A brand gold sales consultant said.
In addition, the gold accumulation business of banks is heating up at the same time. In order to adapt to market changes, Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications, China Merchants Bank and other banks have recently adjusted the starting amount of gold accumulation business.
A number of gold mining companies reported good results in the third quarter
It is worth noting that benefiting from the sharp rise in gold prices during the year, the performance of many listed gold mining companies is expected to increase.
Shandong Gold recently released a performance forecast for the first three quarters of 2024, announcing that after preliminary calculations, it is expected that the net profit attributable to the parent company in the first three quarters of 2024 will be 1.85 billion yuan to 2.25 billion yuan, an increase of 505 million yuan to 905 million yuan compared with the same period last year, an increase of 37.52% to 67.26% year-on-year.
According to public information, Shandong Gold has built a world-class gold production and resource reserve base in the northwest region of Shandong Jiao, forming a complete industrial chain integrating exploration, mining, mineral processing, refining, deep processing and sales of gold products. As for the reasons for the increase in performance, Shandong Gold analyzed that during the period, the company increased the production operation rate, continued to deepen the cost reduction and efficiency increase, and improved the operating efficiency and stabilized the production cost through scientific and technological innovation, asset revitalization, centralized procurement and other methods. At the same time, the rise in gold prices in the first three quarters of 2024 and the acquisition of Shanjin International also drove the company's profits higher.
On the evening of October 14, Hunan Gold announced that the company expects to achieve a net profit attributable to shareholders of listed companies of 647 million yuan to 689 million yuan in the first three quarters of 2024, a year-on-year increase of 68.50% to 79.40%. Hunan Gold said that during the reporting period, the main reason for the increase in performance was the year-on-year increase in the sales price of the company's gold, antimony and tungsten products.
According to the performance forecast of Shanjin International, it is expected to achieve a net profit attributable to the parent company of 1.68 billion yuan to 1.73 billion yuan in the first three quarters, a year-on-year increase of 50.22%-54.69%. The company said that its mines continued to maintain stable operation, and the year-on-year increase in net profit was mainly due to the increase in gold and silver prices and the increase in sales volume.
Will the price of gold continue to rise?
According to the analysis, the current round of gold rise is mainly due to the recent increase in geopolitical tensions in the Middle East, and the increase in demand for gold as a safe-haven asset. In addition, interest rate cuts are also one of the important factors contributing to the rise in gold prices. Goldman Sachs expects the Fed to cut interest rates by 25 basis points in a row from November 2024 to June 2025, bringing the terminal rate range to 3.25%-3.5%.
Although the price of gold has risen sharply, Wall Street is still optimistic about its subsequent performance. At the annual meeting of the London Bullion Market Association (LBMA) in Miami, United States, experts predicted that the price of gold could reach $2,917 an ounce by the end of October next year, up about 10% from the current price.
Qu Rui, an analyst at the research and development department of Oriental Jincheng, believes that the current United States inflation is declining slowly, the market's expectations for the expansion of United States debt are increasing, and the geopolitical situation in the Middle East has not eased, and the safe-haven demand continues to drive gold prices up, so gold prices still have room to rise.
Looking ahead, Xiong Xuewei, a senior futures analyst at Minsheng Futures, said that there are still a lot of uncertainties in the market, so gold is worth investors' attention. Changes in market sentiment caused by the pace and magnitude of the Fed's interest rate cuts, the course and outcome of the United States election, and more importantly, the rise in global risk assets led by China's policy combination will have an impact on the volatility of gold prices.
Some experts also pointed out that gold prices fluctuate from time to time due to a variety of factors. Investors should have the basic knowledge and risk tolerance of precious metal investment, and should not chase the rise and fall based on their own investment experience, investment ability and risk appetite.