Fresh wave of gold buying ahead of Chinese New Year
Chinese consumers are happy to see the price of gold drop ahead of the New Year, enabling purchases at 50% lower prices as compared to the same period last year.
Posted: Thursday , 16 Jan 2014
MUMBAI (Mineweb) -
Gold prices fell in 2013, breaking a 13 year winning streak and consumers in China have been taking advantage of the lower prices, with demand galloping to new heights before the start of the Lunar New Year on January 31.
As 2014 is considered the year of the horse in China, horse related golden products have posted massive sales across the nation.
Even as demand from India has been dented given the government's many import curbs, Chinese consumers have been eager to get their hands on the precious commodity, given the massive price slump.
Many gold retailers in Beijing and Hong Kong have been catering to a steady stream of customers, since the price of the precious metal started decreasing over the last three months.
Hong Kong bullion retailer Chow Tai Fook posted 34% growth in its third quarter sales, with the homegrown competitor especially marketing to middle class consumers and youngsters. Other Chinese gold jewellery operators have also launched several promotions to boost sales, ahead of the annual pick up for the New Year.
Chinese language newspaper Beijing News reported that gold sales had surpassed 10 million yuan ($1.7 million) an hour, after Cai Bai jewellers in Beijing opened to a scintillating start on January 1, setting a new record.
Cai Bai is touted as one of the largest gold jewellery chain stores in Beijing. It reported sales of 200 million yuan (about $33 million) on December 31, 2013, while China Gold’s flagship store at Jiang Zhaikou sold more than 150 kilograms of gold on the same day.
Sun Gold Jewellers noted that since international gold prices slid in December, gold sales have grown significantly at its many stores. Sales surged by at least 30% in December 2013 from a month ago, and were up by 25% as compared to the same period in 2012, the retailer told a news agency.
One of Hong Kong’s best known jewellers, along with Chow Tai Fook and Luk Fook has been Chow Sang Sang. The latter has embarked on a massive expansion drive in the mainland China market, looking to take advantage of the growing demand particularly in second and third tier cities.
Incidentally, China's gold imports more than doubled last year to exceed 1,000 tonnes, ousting India as the biggest global buyer.
While international gold prices were $1,696 per ounce at the beginning of 2013, and fell 28% to less than $1,200 end December 2013, the largest drop since 1981, retail prices of gold also dipped in the Chinese capital.
The price of a gold bar was recorded at $44.29 per gram, and gold jewellery was priced at $48.73 per gram.
Last year, during this period, prices were hovering at around 400 yuan per gram. This year, it has fallen 50% to around 200 yuan per gram.
Even as investors in the international market redeemed exchange traded funds backed by more than 800 tonnes of gold, in anticipation of the US Fed's tapering of quantitative easing, the extra supply was absorbed by Asians, primarily Chinese consumers, who bought jewellery and invested in bars and coins.