By love-89.com As gold prices continue to hit historic highs, consumer demand for gold jewelry in China is weakening, leading to a wave of store closures across the country. On October 21, the Asian market opened with spot gold prices following the trend from the previous trading day. By 8 AM, the price reached $2,754.01 per ounce (approximately 19,601 RMB), setting a new record. However, despite the rising gold prices, demand for gold jewelry is dwindling, prompting a significant number of gold stores to shut down.
According to reports from Qilu Evening News, major brands like Chow Tai Fook, Lao Feng Xiang, Chow Sang Sang, and Chao Hong Ji announced through their official WeChat accounts that the price of pure gold ornaments has surpassed 800 RMB per gram. For instance, the price of Chow Tai Fook’s Fu gold jewelry was 806 RMB on October 18.
In examining the reasons behind the rising gold prices, Bai Wenxi, Chief Economist for the China Region of the China Enterprise Capital Alliance, noted that the increase is primarily driven by international monetary easing policies and a strong willingness among various central banks to increase their gold holdings.
On the flip side, data from the National Bureau of Statistics of China reveals that the retail sales of gold and silver jewelry have been experiencing negative growth for six consecutive months since April this year. Overall, from January to September, the retail sales totaled 245.4 billion RMB, a decrease of 3.1% compared to the previous year.
Recent financial reports from the Lukfook Group show a decline in overall retail sales and a net reduction of 76 stores between July 1 and September 30. Other companies focused on gold jewelry, such as Chow Sang Sang and Chow Tai Fook, are facing similar challenges.
Many Chinese netizens have expressed frustration, saying, “Whether gold prices go up or down, I can’t afford it!” The continuous rise in gold prices has deterred many potential buyers. One consumer, Mr. Zhang, shared, “I was planning to purchase gold jewelry for my wedding at the end of this year, and I’ve been keeping an eye on the prices. When it was around 600 RMB per gram, I thought it was too expensive, and now it has jumped to 800 RMB.”
Despite the high prices, the market remains generally optimistic about the future performance of gold.