Our reporter Gou Mingyang
The Spring Festival is approaching, and the gold market is ushering in the pre-holiday sales season. Recently, reporters visited the main store of Caishikou Department Store Co., Ltd. (hereinafter referred to as "Caibai") in Xicheng District, Beijing, and saw that the gold counters on the first and fourth floors were crowded with customers, who came to buy gold jewelry and investment gold bars. There was an endless stream of people.
In recent years, as people’s demand for wealth preservation and hedging has increased, sales volume in the gold jewelry market has continued to rise. Data released by the National Bureau of Statistics show that in December 2023, the total retail sales of gold and silver jewelry by units above designated size nationwide increased by 29.4% year-on-year, and the cumulative year-on-year growth for the whole year was 13.3%. Both data ranked first among commodities for units above designated size.
Gold jewelery demand becomes growth engine
"Before the Spring Festival every year is the peak consumption period, but this year there are particularly many consumers, much more than the same period in previous years. Many people come here for activities such as the '2024 Beijing New Year Festival' and the Beijing Consumption Season." Caibai sales According to personnel, the company's dozens of directly-operated chain stores in Beijing-Tianjin-Hebei, Xi'an, Suzhou, and Baotou are full of customers, setting off a small upsurge in gold consumption.
Although the domestic gold price has risen to over 600 yuan/gram, gold is still a popular product, and many consumers say they "buy up, not down" and "the more it goes up, the more they buy."
Ms. Li, a customer queuing up to pick up the goods, said that gold represents wealth, auspiciousness and health, and implies prosperity, happiness and happiness. "The Chinese New Year is coming soon, so I was thinking about buying gold jewelry for my parents, which would be a good start for the New Year. In previous years, I didn't know what to give my parents during the Spring Festival. After thinking about it again and again this year, I decided that buying gold jewelry would definitely not be wrong. After all, Gold not only has good meaning, but also maintains its value,” Ms. Li said.
According to statistics recently released by the China Gold Association, national gold consumption in 2023 will be 1,089.69 tons, a year-on-year increase of 8.78%. Among them, gold jewelry was 706.48 tons, a year-on-year increase of 7.97%; gold bars and gold coins were 299.60 tons, a year-on-year increase of 15.70%; industrial and other gold was 83.61 tons, a year-on-year decrease of 5.50%. Caibai sales staff said that in the past, most of the people who bought gold were middle-aged and elderly people, but in recent years, more and more young people have been buying gold jewelry. The sales of zodiac signs, bracelets, necklaces and other products have increased significantly.
Experts remind consumers that when purchasing gold products, they must first clarify their goals and never blindly follow the trend. If you pay more attention to craftsmanship and beauty, gold jewelry is naturally the best choice. However, the processing fees and handling fees are relatively high. Comprehensive comparison of gold jewelry recycling quotes, the difference between the two is often more than 100 yuan/gram. If you consider value-preserving investment, you can choose investment precious metals, whose sales price and repurchase price are relatively small.
Xiaoke’s new style is popular
Driven by a series of policies to boost consumption, the national consumer market continues to recover steadily, and gold and silver jewelry has become one of the fastest growing categories among various commodity retail categories. Gold jewelry processing and retail companies are innovating in product design. Gold jewelry with small weight and new styles are highly favored by consumers, driving the popularity of gold jewelry consumption.
Ms. Wu, a customer who chooses gold transfer beads, told reporters that she buys a transfer bead whenever she has spare money and has already saved a lot. Compared with gold bars or larger-weight gold jewelry, transfer beads weigh about one gram each and are less affected by fluctuations in gold prices.
Many people in the industry believe that the Year of the Dragon is the zodiac year, and the zodiac economy and gold consumption are expected to resonate. Data released by Taobao in January showed that the popularity of gold jewelry in the Year of the Dragon increased by more than 500% year-on-year, and the search volume for dragon-shaped pendants increased by more than 400% year-on-year. Caibai sales staff said that many gold jewelry related to the Year of the Dragon are very popular, such as gold dragon banknotes, Year of the Dragon commemorative gold bars, dragon-shaped jewelry, etc. Among them, the transport beads engraved with the zodiac dragon and small accessories with blessing meanings are particularly popular among consumers.
"This year's 'Hug the Dragon' series of transport beads is particularly cute. There are 5 kinds of beads in total. They hold blessing characters, money bags, gourds, peace fruits, and flowers in their arms. Whether you wear it yourself or give it to others, the meanings are very good. ." Before the salesperson could finish the introduction, several customers placed orders.
Customer Ms. Zhang said while checking out that after her child was born, she would come here every New Year to choose a lucky bead for that year's zodiac sign, which was very memorable. The transfer beads can be put on a red string and turned into a small bracelet to be worn as jewelry.
Caibai sales staff said that young people are now pursuing more and more fashion. This year, a lot of trendy gold jewelry was launched for young people, and the sales were very good. Recently, Caibai has also cooperated with Beihai Park to jointly launch cultural and creative jewelry such as "Eternal Oath". The most representative ones are the "Kowloon Auspicious" series of products and the "Dragon Raising Its Head" pure gold jewelry, which conveys good luck and good fortune. Good blessings come rolling in.
Value-preserving investment drives consumption boom
In addition to the gold jewelry counter, the gold bar investment counter is also crowded. The reporter noticed that the basic gold price of Caibai Investment updated in real time on the big screen was close to the price of bank gold bars.
Customer Mr. Chen told reporters that the price of gold has been rising in the past few years, so he bought some gold for long-term value preservation. Although gold prices may fluctuate in the short term, holding gold should be a good choice for the long term. Moreover, gold is relatively easy to trade. When you need money, you can sell it at any time without losing it in your hands.
As the economic level improves, more and more consumers are paying attention to financial management and investment. As a traditional safe-haven asset, gold is often more popular when financial markets are volatile. In 2023, international gold prices will fluctuate at high levels. At the end of December 2023, the year-end price of spot gold in London was US$2,062.40 per ounce, an increase of 12.39% from the opening price of US$1,835.05 per ounce at the beginning of the year; the annual average price was US$1,940.54 per ounce, an increase of 7.80% from US$1,800.09 per ounce in 2022. Domestic gold prices have also risen. The closing price of Au9999 gold on the Shanghai Gold Exchange at the end of December 2023 was 479.59 yuan/gram, an increase of 16.69% from the opening price at the beginning of the year; the weighted average price for the year was 449.05 yuan/gram, an increase of 14.97% from 2022.
Talking about the reasons for the rise in gold prices, Xia Yingying, a non-ferrous metals analyst at Nanhua Futures, said that global central banks have increased their holdings of gold reserves, the Federal Reserve has loosened its monetary policy, rising risk aversion due to banking turmoil and geopolitical conflicts, as well as the downgrade of U.S. debt credit ratings and the imbalance between supply and demand. Pushing up gold's premium over U.S. Treasury real interest rates are all factors that will drive the price of precious metals higher in 2023.
For consumers with investment intentions, what they are most concerned about is how the price of gold will change in the future. Xia Yingying analyzed that the Federal Reserve may start cutting interest rates in June. Compared with the current market expectations for the Federal Reserve to cut interest rates before May, gold prices may still fluctuate in the first quarter, and bulls and bears will continue to repeatedly switch between expectations and reality for verification. As the Federal Reserve enters an interest rate cut cycle in 2024, the center of gravity of the 10-year U.S. bond yield will continue to shift downward this year, liquidity is also expected to relax marginally as balance sheet shrinkage slows, the center of gravity of precious metal prices is expected to rise overall, and gold prices may hit another high new highs. In the long term, the decline in the credibility of the US dollar will promote the adjustment of the central bank's foreign exchange reserve structure and support the upward focus of the gold cycle. From a mid-cycle perspective, it is expected that gold prices are expected to reach a new high in 2024, and may show a trend of first low and then high.