In September, the international spot gold price fell slightly, while the domestic retail price of gold in full gold continued to rise. The selling price of gold at multiple gold stores has increased from 592 yuan per gram in early May to around 600 yuan per gram, with the retail price of branded gold reaching 601 yuan per gram.
How willing are consumers to purchase when gold prices rise? Although the price is at a high level, consumers' enthusiasm for buying gold remains undiminished. At 590 yuan per gram, I wanted to wait and see again, but now it has risen to 600 yuan, so I have to buy it. Ms. Li, born in the 1990s, said to China that it is a through train.
According to data from the China Gold Association, the national gold consumption in the first half of this year was 554.88 tons, a year-on-year increase of 16.37%, including 368.26 tons of gold jewelry consumption, a year-on-year increase of 14.82%.
According to data released by the State Administration of Foreign Exchange recently, as of the end of August, the central bank of China's gold reserves were 69.62 million ounces, an increase of 930000 ounces compared to the previous month. This is the 10th consecutive month that the central bank of China has increased its gold reserves.
Beijing: The retail price of gold has risen above 600 yuan/gram, and consumer enthusiasm remains strong
Image source: CCTV Finance
According to CCTV Finance and Economics, at 4:00 pm on weekdays, a gold shop in Xicheng District, Beijing saw an endless stream of people buying gold jewelry. The number of people purchasing gold jewelry on this floor alone has exceeded 300. The staff stated that the number of people purchasing gold jewelry in the store has been increasing since August, with many young people coming to purchase. The most popular gold jewelry are rings and bracelets.
Liu Jing, Regional Manager of a jewelry company in Beijing, said that the number of people purchasing gold jewelry has increased by at least three times compared to the same period last year, and the selection rate for light and heavy jewelry is now relatively high.
Kunming, Yunnan: The Golden Nine Silver Ten Peak Season Comes, and Gold Accessories Are Popular
As the saying goes, 'nine gold and ten silver' also apply to the gold sales market. In Kunming, Yunnan, as the Mid Autumn Festival approaches, consumption in the gold market has also flourished.
Image source: CCTV Finance
In Nanping Pedestrian Street, where gold jewelry stores are relatively concentrated in Kunming, although it is a weekday morning, there are still many customers in the store choosing their desired jewelry. The salesperson introduced that in recent times, the sales of various types of gold jewelry in the store have been considerable.
Image source: CCTV Finance
The reporter visited multiple gold jewelry stores and learned that exquisite, small, and complete sets of jewelry are the most popular among young people.
Shanghai: Gold futures rose to a new high in 13 years
On September 13th, the gold futures price on the Shanghai Futures Exchange reached a new high in nearly a decade, approaching 470 yuan per gram.
The head of an offline gold sales store in Shanghai introduced that although the price of gold is rising, it has basically not affected people's purchasing enthusiasm, and the investment attribute of gold is still an important reason.
Image source: CCTV Finance
As of the close on September 13th, gold futures on the Shanghai Stock Exchange have risen from around 453 yuan per gram in mid August to 467.66 yuan, reaching a new high in thirteen years; In contrast, London gold spot prices showed a volatile trend, maintaining at $1900 per ounce.
Li Mingyu, Deputy Director of Xinhu Futures Research Institute, said that the current internal gold market is near a historical high. We are still optimistic about the future trend of internal gold. It is recommended that investors do not blindly pursue gains when investing in gold futures and physical gold, but rather invest rationally.
Why does gold prices remain high?
For some time, the international gold price has shown a fluctuating trend, dropping from a high of $2081.82 per ounce (approximately 31.1035 grams of gold per ounce) in early May to $1919 per ounce.
In response to this trend, Wan Zhe, a researcher from the the Belt and Road Institute of Beijing Normal University and former chief economist of China Gold Group, said in an interview with China News Service that, due to the uncertainty of the prospect of the Federal Reserve's interest rate increase and international geopolitical conflicts, there is still momentum to hold gold prices at a high level.
Overall, the international gold price is still at a historical high. Wan Zhe said, 'However, whether from the marginal effects of risk aversion or US economic data, it can be seen that the motivation for international gold to further climb up is not very strong.'.
At the same time, under the relatively flat fluctuations in international gold prices, both the price and market of domestic gold seem to be more hot.
The main reason for this may be related to the current choice of investment product direction. Wan Zhe stated that investment channels such as real estate and the stock market currently appear to be less active in the market. In terms of asset allocation, people tend to be more inclined towards safe haven assets rather than risk assets. Among safe haven assets, gold is the most familiar, beloved, and easily accessible product for the public.
Central banks around the world are increasing their holdings of gold reserves, and institutions are optimistic about the future trend of gold prices
The Global Gold Demand Trends report released by the World Gold Council shows that global central bank gold demand reached a record high of 387 tons in the first half of 2023. Moreover, global official gold reserves continued to increase in July. Data shows that the net purchase volume of global central banks reached 55 tons in July, and the momentum of long-term purchases remains strong.
In this regard, Zhou Maohua, a macro researcher at the Financial Market Department of Everbright Bank, analyzed in an interview with China Business Daily on September 13th that in recent years, some central banks have increased their holdings of gold mainly by optimizing the structure of official reserve assets, promoting diversification of official reserve assets, enhancing their ability to withstand global financial market fluctuations and asset stability.
Wang Lixin, CEO of the World Gold Council in China, previously pointed out in an interview with media reporters that the global central bank's increase in gold holdings is not based on the need for short-term investment profits, but rather on strategic considerations for the continuous optimization of foreign exchange reserve asset allocation structure. In addition, gold has provided relatively stable annualized returns over the past few decades, which is also a major factor for central banks in various countries to be willing to allocate gold assets for the long term.
Global central bank demand for gold purchases is likely to remain strong throughout 2023. The 2023 Central Bank Gold Reserve Survey released by the World Gold Council in June this year showed that 24% of surveyed central banks plan to increase their gold reserves in the next 12 months, while 62% of surveyed central banks stated that the proportion of gold in total reserves will increase in the future, compared to only 42% last year.
Some analysts also say that gold, as a financial asset, has a considerable investment return rate. Since 2018, the average annual yield of gold has exceeded 6%, higher than the yield of US treasury bond bonds in the same period, which makes increasing gold holdings an important means of preserving and increasing value.
It is worth noting that the data released by the World Gold Council also shows that in the first half of this year, China increased its holdings of about 100 tons of gold reserves, becoming the country with the highest increase in gold holdings in the first half of the year.
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