Strong Lunar New Year demand fuels China’s gold jewellery market
Retailers offer small discounts to spur holiday sales but are set to raise prices after the festival, as investment banks issue bullish outlooks
In the run-up to Lunar New Year, Chinese consumers were busy choosing gold jewellery, a traditional gift with deep cultural connotations, as strong market sentiment overshadowed sharp fluctuations in gold prices and assessments of the sector’s outlook by investment banks remained upbeat.
Jewellers offered small discounts to boost holiday sales. For example, Chow Tai Fook Jewellery Group, China’s largest retailer by store count, launched an 80 yuan (US$12) discount per gram on gold items in its stores nationwide through the end of the Spring Festival. The discount is linked to China’s daily spot gold price.
The jeweller planned to raise prices of some fixed-price gold and gold-inlaid diamond products after the holiday, as gold and raw material prices had increased owing to recent international and domestic market factors, according to social media posts by sales associates of Chow Tai Fook.
“We have been quite busy since the morning of Valentine’s Day, with many customers coming in to select jewellery,” said an associate at a Chow Tai Fook store in Beijing’s downtown Haidian district. “It’s very rare for the Spring Festival holiday to coincide with Valentine’s Day, and I will be working a bit of overtime.”
“Consumers have indicated strong rigid demand, rising investment sentiment, and a notable shift towards younger buyers,” said Fu Yifu, a special researcher at Su Merchants Bank in Nanjing, in eastern China’s Jiangsu province.