The international gold price has recently fallen below 2,000 US dollars/ounce, about 600 yuan/gram, but prices in most gold stores in Chengdu are still strong.

  Why is domestic gold price strong?

  Red Star Capital Bureau reported on February 17 that the Spring Festival holiday is coming to an end, and the gold market, which has experienced a new round of hot market conditions, continues to be strong.

  On the 17th, Red Star Capital Bureau interviewed in the Chengdu area and learned that the quotations of pure gold in most gold stores are still running at a high level, staying at around 600 yuan/gram. However, some gold stores have added Valentine's Day discounts, and the price has been as low as 530 yuan/gram.

  Compared with the booming gold consumer market, international gold prices have continued to fluctuate and fall. Among them, COMEX gold futures prices and London gold spot prices have both fallen since February, once falling below $2,000 per ounce. However, as of press time, prices have rebounded.


"Today's quotation is 626 yuan/gram"

  On February 17, Red Star Capital Bureau learned from an interview that most gold stores’ pure gold quotations were still above 600 yuan/gram.

  Among them, a clerk at the Chow Tai Fook store said that the price of pure gold has been stable at around 620 yuan during the Spring Festival, and "today's quotation is 626 yuan/gram." However, the clerk also said that on that day, you can enjoy a discount of 30 yuan per gram, which is 596 yuan per gram.

  The clerk of Lukfook Jewelry also reported a price of 626 yuan/gram to the Red Star Capital Bureau. "(Lukfook Jewelry) gold prices have generally been around 620 yuan recently." Regarding the high gold price in the store, the clerk said helplessly, "We can't control the gold price."

  A store of Zhou Taisheng revealed to Red Star Capital Bureau that the gold price on that day was 566 yuan/gram, which was even lower than that on Valentine’s Day. It said that the quoted price on Valentine's Day was 629 yuan/gram, which was 569 yuan/gram under the discount of 60 yuan per gram. "The price in the past month has been around 620 yuan. The Valentine's Day discount is quite strong. The discount of 60 yuan per gram will end tomorrow (February 18)."

  In comparison, China Gold (600916.SH) gold prices are relatively moderate. A store clerk said that the gold price on the 17th was 539 yuan/gram. “The gold price dropped a little the day before yesterday, to 530 yuan/gram, but it has gone back up.” As for the store’s preferential policies, he said that there are still prices of jewelry with a fixed price of 1,000 yuan. The free price is 300 yuan, calculated based on gram weight, and members can enjoy a discount of 5 yuan per gram.


  The gold market sinks into third- and fourth-tier cities

  During the exchange with gold sales staff, the reporter found that although there were many customers buying gold during the Spring Festival last year, compared with this year's Spring Festival, gold sales this year have doubled, and consumers are more enthusiastic about buying gold. Some insiders said that this has a certain relationship with the sinking of the gold market in recent years. According to public data, the per capita annual consumption level of gold and jewelry in third-tier and below cities has increased from 460.7 yuan in 2017 to 617.5 yuan in 2022, with a compound annual growth rate of 6.0%, exceeding the first- and second-tier cities and the national average.

  China Gold's previously disclosed investor relations activity record table shows that the company's store layout in 2023 has reached the target of 4,000 established at the beginning of the year, and will maintain a growth rate of 10% in the future. Strong areas are mainly concentrated in third- and fourth-tier cities, and major business districts in first- and second-tier cities. The layout is not saturated, and it is also an area that needs to be focused on in the future.

  Chao Acer (002345.SZ) also previously stated that the company’s existing stores are mainly in first-, second- and third-tier cities. In the past two years, its expansion has mainly focused on second- and third-tier cities, but mature areas will sink to third- and fourth-tier cities. , sinking even further. In addition, Chow Tai Fook's "2023 Jewelry Survey Report" shows that consumers in lower-tier cities pay more attention to brands, and 89% of consumers in third-tier cities and 92% of consumers in fourth-tier cities will have their purchases influenced by jewelry brands.


  International gold prices fell while domestic gold prices strengthened

  In terms of international gold prices, there has been a decline recently, once falling below 2,000 US dollars per ounce.

  COMEX gold futures prices have fallen for two consecutive weeks. Among them, on February 13, the price of COMEX gold futures fell sharply by 1.33%. It continued to fall on February 14, falling to US$1,996.4 per ounce intraday, a drop of 0.11% on that day.

  However, COMEX gold futures prices rebounded in the next two trading days, and as of press time, were trading at $2,025.5 per ounce.

  In addition, London gold spot prices also fell. The price of gold futures on COMEX fell sharply on February 13 and 14, falling below $2,000 per ounce. Among them, it fell 1.34% on February 13. As of press time, the spot price of gold in London has also rebounded and was reported at 2013.055 US dollars per ounce.

  However, reporters found that since 2023, compared with the international gold price, domestic gold prices in China have been relatively strong. In this regard, He Yi, a precious metals analyst at Chuangyuan Research Institute, said that since 2023, domestic gold prices have been slightly stronger than international gold prices, and the main internal logic is the impact of consumption and investment tendencies.

  "First of all, domestic gold consumption is better than abroad, and China's gold consumption will be the first in the world in 2023; secondly, it is the impact of investment tendencies. In 2023, there will be a net outflow of international gold ETF holdings, while the domestic gold ETF will be a net inflow, reflecting domestic and international investment in gold. The tendencies are inconsistent. The international market tends to favor equity assets, while gold is sought after domestically. The above factors work together to make domestic gold price premium." He Yi said.

  Regarding whether there is still room for gold prices to reach new highs, UBS pointed out in a recent report that due to its expectation that the Federal Reserve will begin to cut interest rates, gold and silver prices are expected to rise further in 2024, and the gold price is expected to hit 2,200 per ounce by the end of this year. Dollar.

  According to a report by China Central Broadcasting Network, Liu Dongbo, a senior researcher of non-ferrous and precious metals at SDIC Essence Futures Research Institute, believes that the recent fluctuations in international gold prices within a narrow range are due to the market's fierce game over when the Federal Reserve will cut interest rates. It predicts that gold will continue its strong trend this year. "From a mid- to long-term perspective, we believe that gold's strong trend will continue this year, and it is only a matter of time before it reaches a record high."

  Chengdu Commercial Daily-Red Star News reporter Deng Lingyao

  Comprehensive China Times

  Source: Chengdu Business Daily