ANN/CHINA DAILY – Rising gold prices have not dented consumer demand for jewellery in China. This trend will likely continue due to factors like yuan depreciation, need for safe-haven assets and the upcoming traditional wedding season, experts said.
On Friday, the Shanghai Gold Exchange saw gold prices closing around CNY470 per gramme, up around 20 per cent from less than CNY390 per gramme recorded on September 15 last year.
On Thursday, the price of gold futures AU 2312 on the Shanghai Futures Exchange exceeded CNY470 per gramme, a record high. The retail market for gold jewellery is also buzzing with sales activity despite pure gold jewellery prices still rising to above CNY600 per gramme.
“Despite the consistently high gold prices, consumers remain eager to purchase,” said a gold jewellery retail store manager Tang Huan at Shuibei, a gold jewellery manufacturing and trading hub in Shenzhen, Guangdong province.
“They are drawn to its value-preserving attributes and ease of recycling. Additionally, September and October are peak months for traditional weddings. This is further fueling the demand for gold jewellery worn at such times,” she said. She said many shops have ventured into gold recycling, typically offering prices CNY10 less than the SGE prices.
“Our store’s recycling volume is up by 15-20 per cent compared to last month.”
Data from the China Gold Association showed that in the first half of this year, overall gold consumption across China reached 554.88 metric tonnes, up 16 per cent year-on-year, with gold jewellery consumption at 368.26 tonnes, up nearly 15 per cent.
According to a recent World Gold Council report on retail jewellery trends, 58 per cent of the 538 gold jewellery store managers, regional retailers and business leaders surveyed in 76 cities in China said they plan to increase their gold jewellery inventory in the coming year.
Senior analyst Ray Jia at WGC China, said despite challenges, an improved outlook for China’s economy could provide some support for local gold demand.