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after the federal reserve announced a rate cut, international gold prices started a new round of sharp increases and repeatedly set new historical highs.

securities times reporters have recently conducted multiple investigations and found that as gold prices continue to rise, sales of gold jewelry have declined significantly, which has had a significant impact on the gold industry chain. relevant parties are currently actively looking for countermeasures.

at the same time, banks have also launched a new round of adjustments to businesses such as accumulated funds.

gold prices hit a new high again: practitioners complained that "no one bought it"

"no one is buying!" a senior salesperson in the gold and jewelry industry in shenzhen complained to the securities times reporter that the recent sharp rise in gold prices has had a significant impact on the sales of gold jewelry. she said that the rising gold prices have affected the willingness of many customers to buy gold jewelry, "they think it is too expensive." the above-mentioned person said that during the mid-autumn festival holiday just passed, their sales were not very good, "(before) many customers were still waiting for the gold price to fall, but the longer they waited, the more expensive it became."

against the backdrop of a new wave of gold price increases, a reporter from the securities times recently randomly visited a number of gold and jewelry stores in shenzhen and found that they were not very popular. during the evening peak hours, many gold and jewelry retail stores had relatively few people.

as for the price of gold jewellery at the terminal, the reporter found that with the rise of international gold prices, the prices of gold jewellery of many brands have also risen significantly. after adding the labor costs, the price of gold jewellery in many brand stores has exceeded 800 yuan per gram. just over a month ago during the "chinese valentine's day", the price of gold jewellery in many brand stores was still just over 700 yuan per gram.

it is understood that as the national day holiday is approaching, many gold and jewelry stores have generally placed their hopes on the national day, hoping that there will be an opportunity for a wave of sales during the holiday.

a recent scene of a gold jewelry store in a commercial center in shenzhen photographed by hu huaxiong

the impact is transmitted to all parties in the industry chain to find countermeasures

the phenomenon of shrinking gold jewelry consumption due to the continuous rise in gold prices has also spread to shuibei district in shenzhen, which is the gold jewelry distribution center in my country. a senior employee of a gold jewelry company in shuibei district, shenzhen, told reporters that some small and medium-sized gold jewelry merchants have closed their stores recently. he said that due to poor sales and long-term losses, a store opened by a relative of his in shuibei district is preparing to close.

large companies in the industry have also been generally affected, and the impact has become apparent since the second quarter of this year.

for example, chow sang sang's recently released 2024 interim report shows that in the first quarter of 2024, the company's jewelry business in hong kong and macau recorded a 4% increase in same-store sales growth, while the same-store sales growth in the mainland fell by 9% from last year's high base. however, due to the sharp rise in gold prices in march and april, by the end of the second quarter, chow sang sang's same-store sales growth in hong kong and macau and the same-store sales growth in the mainland also recorded a 24% decline.

the revenue of industry leader chow tai fook also declined. from april to june this year, chow tai fook's retail value fell by 20% year-on-year, of which the retail value in the mainland fell by 18.6% year-on-year.

faced with the impact of rising gold prices on the industry, some merchants and enterprises are also actively looking for countermeasures to reduce the adverse effects. for example, according to the reporter, some terminal merchants have made further efforts in product selection and styles in order to maximize the attractiveness of the products. in addition, they have also exercised stricter control over costs.

some large companies in the industry are also actively responding. in response to an interview with a securities times reporter, a spokesperson for chow tai fook jewellery group said that in the current market environment, chow tai fook is focused on implementing an optimized pricing strategy. for example, its fixed-price gold products are very popular with customers. judging from the operating performance of chow tai fook jewellery group in the first quarter of fiscal year 2025 (april to june 2024), the retail value of mainland fixed-price gold products has increased significantly, reflecting that such products are popular with consumers and have become one of the trends in gold consumption. this offsets some of the impact of the recent slowdown in gold demand caused by the rise in gold prices, and also confirms the effectiveness of the group's focus on moving towards higher value growth and profit quality.

in terms of product strategy, the above-mentioned chow tai fook jewellery group spokesperson stated that chow tai fook actively promotes product innovation to adapt to market changes to ensure that products remain differentiated in the market and resonate with consumers. chow tai fook said that the group will continue to focus on implementing five major strategic guidelines, including brand transformation, product optimization, accelerated digital transformation, improved operational efficiency and enhanced talent training, in order to consolidate its market leadership and seize business opportunities in existing and new markets.

a spokesperson for chow tai fook jewellery group said in an interview that gold price is only one of the factors that affect gold jewellery consumption. gold price fluctuations are cyclical, and when gold prices tend to stabilize, market demand will recover.

the big banks have taken action, will there be a new round of adjustments to the starting amount of accumulated funds?

on september 25, china construction bank issued an announcement stating that from 9:10 am on september 27, 2024, beijing time, the starting amount of regular accumulation of china construction bank's personal gold accumulation business (including daily average accumulation and optional daily accumulation) will be increased from 600 yuan to 700 yuan. regular accumulation plans that have been successfully set up before the adjustment will continue to be implemented and will not be affected. after the regular accumulation plan with an extension expires, if the original planned accumulation amount meets the latest requirements, the extension will be successful, otherwise the extension will fail.

before ccb, abc announced on september 18 that it would adjust the starting point of accumulated gold purchase to a floating method with gold price. abc said in the announcement that in order to implement regulatory requirements and facilitate customers, the starting point of the purchase of abc deposit gold pass no. 2 will be adjusted to a floating method with gold price (the purchase price of deposit gold pass during the closed market is based on the latest valid quotation), and the transaction increment unit will remain unchanged at 10 yuan. the adjustment will take effect after the end of the trading day on september 19. the fixed investment contracts that have taken effect before this adjustment will not be affected.

in fact, as the gold price has been rising this year, the bank's deposit gold business has been favored by investors, and many banks have adjusted the starting amount of the deposit gold business. in the first half of the year, china construction bank, agricultural bank of china, industrial and commercial bank of china, bank of china, postal savings bank of china, china merchants bank, ping an bank and many other banks have successively raised the starting point of deposit gold purchase.

how long will this round of gold price rise last?

in recent years, the relationship between gold supply and demand has been impacted by inflation, geopolitical changes and other factors, and gold prices have continued to rise and hit record highs many times. on september 25, beijing time, london gold spot once again set a record high, reaching $2,670.539 per ounce, and the main contract of shanghai gold futures also broke through 600 yuan per gram for the first time, setting a new record.

the recent rise in gold prices was mainly driven by the fed's interest rate cuts. the logic is that the us dollar is under pressure to depreciate under the us interest rate cuts, and the international gold price, which is mainly denominated in us dollars, has gained upward momentum. the world gold council also mentioned recently that the international gold price has hit a new high, and the rmb gold price has also set a new record. the fed's unexpected interest rate cuts and high geopolitical risks are the main driving forces.

regarding the trend of gold prices, the guosen futures research and consulting team said in an interview with a securities times reporter that the start of the easing cycle and the expectation of the fed's continued sharp interest rate cuts have pushed gold prices to a new record high again recently. if the future us economic data weakens more than expected, the potential increase in interest rate cuts will further push up gold prices. however, if subsequent us economic data releases more "soft landing" signals, the market's current bet on a sharp interest rate cut expectation will still have a certain risk of failure, and the adjustment process from expectations to reality may put some pressure on gold prices.

guosen futures research and consulting team believes that geopolitical tensions and the global central bank's gold purchases may be good for gold prices. at the same time, the uncertainty brought about by the us election will also support gold to a certain extent. gold prices are expected to remain strong for some time to come, and we need to pay close attention to more signals released by us economic data in the future to obtain clues on further interest rate policies.

in the short term, the us gdp data to be released on thursday, the speech by the federal reserve chairman on thursday night, and the us pce data to be released on friday may all have a significant impact on gold prices.