Finance Association, November 21 (Reporter Lu Tingting) Since October, international gold prices have fluctuated greatly. According to market data, spot gold recovered sharply from a record high of nearly 2,800 US dollars/ounce. After “six consecutive declines” and the biggest weekly decline in three years, it regained gains this week. Today, it hit 2,660 US dollars/ounce in the intraday market upward, rising for the fourth consecutive trading day. However, the listing price of pure gold jewelry in most domestic brand gold stores is once again approaching 800 yuan/gram. Analysts believe that there is a high probability that gold prices will remain high before the Spring Festival.

What are the coping strategies of gold brand retailers? Chow Tai Sang (002867.SZ), a person from the securities department confessed, “In terms of products, adjustments have always been made according to consumer consumption trends and changes,” and products with a low customer unit price and strong sense of design have been increased accordingly. Chow Tai ?$#@$ (01929.HK) impressed consumers through product differentiation. A Chow Tai ?$#@$ Jewellery Group spokesperson told Chow Tai ?$#@$ Jewellery Group reporters that as we enter the year-end and New Year holiday season, the company will launch omni-channel publicity and promotion to enhance interaction with consumers.

The price of gold fluctuates

Looking back, the prices of London Gold and COMEX gold futures both set new historical records during the intraday session on October 31, reaching 2790.07 US dollars/ounce and 2,801.8 US dollars/ounce respectively; then, international gold prices “fell six times in a row” over 6 trading days from November 8 to November 15. According to Wind data, London gold now has a cumulative decline of more than 4% last week, closing at 256,2.715 US dollars/ounce on November 15, the biggest weekly decline in nearly three years.

“At the beginning of the month, as Trump won the election and the dust settled in the US election, market expectations of risk declined to a certain extent, risk aversion contracted, and deep adjustments were made to suppress the fall in gold prices.” Song Yunming, an American and European financial analyst at Beijing Asaming International Economic Consulting Co., Ltd., told the Financial Federation reporter.

Entering this week, international gold prices have rebounded markedly. From November 18 to November 20, London Gold has now achieved “three consecutive gains”. Today (November 21), it hit an intraday upward trend of 2,660 US dollars/ounce, rising for the fourth consecutive trading day, hitting a new high of nearly two weeks.

“As for the short-term trend, it is expected that broad adjustments will continue to be the main focus.” Song Yunming said that although Trump intends to reconcile the geographical tension, first, he is not currently in office; second, the geographical situation has been deeply involved so far, making it difficult to mediate the interests of all parties, and he is not optimistic about the timing. Recently, the situation in Russia and Ukraine has once again escalated, and risk aversion has further supported the trend of gold bulls.

Looking ahead to the future of gold prices, Goldman Sachs said in its latest report that gold prices will rise to record levels next year due to central bank purchases and expectations that the Federal Reserve will continue to cut interest rates next year. Goldman Sachs listed gold among the preferred commodity deals in 2025, and said that the price of gold may continue to rise during Trump's presidency, while emphasizing that the target price is $3,000 per ounce until December 2025.

Gold brand retailer response

It is worth noting that the price of gold has risen by more than 28% since this year. Song Yunming believes that gold prices fluctuate greatly, especially this deep correction, which has had a big impact on regular individual investors, and may dampen jewellery consumer confidence in the short term.

According to data from the China Gold Association, in the first three quarters of 2024, the country's gold consumption was 741.732 tons, down 11.18% from the same period in 2023, with gold jewelry falling 27.53% year on year.

An industry insider told the Financial Federation reporter, “As gold prices continue to be high, sales and turnover of some products that are slightly heavy this year have indeed been affected. Consumers may switch to products such as beaded skewers with lower customer unit prices in terms of consumer choices.”

In this context, how can gold brand retailers respond?

The aforementioned person, Chow Tai Sang, told the Finance Association reporter who called as an investor, “The company is actually also restructuring its structure this year, putting on the market some products with higher gross margins, lower overall customer unit prices, strong sense of design and decoration, and emotional value, and more.”

The source said, “We have a subsidiary that specializes in e-commerce. This year, because the overall customer unit price of e-commerce is relatively low, we have not been too affected by the slump in consumption caused by the sharp rise in gold prices.” According to its disclosure, during the Double Eleven period, the company's online omni-channel GMV probably increased by double digits.

A Financial Services Association reporter learned from Chow Tai ?$#@$ Jewellery announced the launch of a brand transformation in April of this year and launched the “Chow Tai ?$#@$ Chuanfu” series, a price-priced gold product, which has recorded sales of over 1 billion Hong Kong dollars within about half a year since launch; the “Chow Tai Fu Palace” series launched in collaboration with the Beijing Palace Museum in August of this year is also selling well.

A spokesperson for Chow Tai ?$#@$ Jewellery Group told the Financial Federation reporter, “These two culturally rich series use traditional gold craftsmanship. They are all priced-price gold product lines. This type of product not only satisfies the current demand of young consumers for Guochao jewelry, but also reduces consumers' wait-and-see considerations due to fluctuations in gold prices, and supports our sales.”