94Ha Viewpoint
Gold prices have been falling for several consecutive days.
COMEX gold futures prices ended eight weeks of consecutive increases. In the domestic market, Shanghai gold futures fell for five consecutive trading days, closing down 1.4% at 665.62 yuan/gram on the night of March 2. The quotations of branded gold shops in first-tier cities such as Beijing and Shanghai generally fell back to the 875 yuan/gram range, and the price of gram in some stores fell by as much as 20 yuan within three days.
At the same time, many gold jewelry stores in shopping malls have promotional activities since March. The reporter visited and found that brands such as Chow Tai Fook and Lao Feng Xiang have gram reduction activities, with a reduction of 30 to 40 yuan per gram, and some store clerks are adjusting price tags. Some consumers also said that the gold jewelry they just bought recently is facing the embarrassing situation of “losing money as soon as they buy it” due to the short-term plunge in gold prices.
The domestic gold jewelry price has dropped sharply
Consumers “lose money as soon as they buy it”
The sharp fluctuations in gold prices have caught consumers who have recently purchased gold off guard.
The reporter visited and found that the quotations of brand gold shops such as Chow Tai Fook and Lao Feng Xiang generally fell from more than 900 yuan/gram to around 875 yuan/gram. A teller of a certain brand revealed: “We were still doing a gram reduction promotion last week, and the price dropped a little today. As the weather in Shanghai warmed up over the weekend, more consumers came to the store.” However, the promotion did not ease the wait-and-see mood of consumers. “The store traffic has increased compared to usual days, but consumers still find it difficult to buy because of the high price.” The above clerk told reporters. In a shopping mall in Shanghai, consumer A Ke said that the pure gold bracelet (about 20 grams) purchased on February 25: “I bought it quickly when I saw the gold price fall. The price per gram was still 895 yuan. As a result, I saw it today and it has fallen to 875 yuan. I lost more than 400 yuan in two days.” Many consumers said that they originally expected the gold price to continue to rise after the Spring Festival, but they did not expect to encounter a sudden adjustment. Online platforms also saw a price plunge. The limited-time discounts on pure gold jewelry on e-commerce platforms such as Tmall and JD.com have increased, and the unit price of some products has dropped to 850 yuan/gram, a drop of more than 5% from the beginning of February.
Faced with the decline in gold prices, some consumers choose to exchange old jewelry to reduce losses. The reporter found that the exchange policies of different brands vary greatly: brands such as Chow Tai Fook and Lao Feng Xiang exchange store gold jewelry with “old jewelry weight × exchange gold price × 0.98%”, and some brands directly exchange new ones with the exchange gold price according to the current store regulations, without additional discounts.
A store clerk of a certain brand explained: “If the consumer bought jewelry last year or the year before, the cost of making up the difference will be lower if they exchange it for a product with a similar weight. For example, a 10-gram gold jewelry previously purchased at 700 yuan/gram can now be exchanged for gold jewelry of more than 10 grams at the exchange price of 762 yuan/gram on March 2.”
The gold price is temporarily blocked from hitting $3,000
On the capital side, there is a large profit-taking selling pressure on the gold price at the integer mark of $3,000.
On February 27, London spot gold fell below the $2,900 mark, closing at $2,876/ounce, and fell to $2,867/ounce during the session; the main COMEX gold contract also fell to $2,887/ounce. On the macro level, the Fed’s hawkish signals exerted pressure, the geopolitical situation showed signs of easing, and the market’s risk aversion sentiment cooled down significantly.
A trader in Shanghai told reporters that some investors chose to take profits after the gold price had previously surged to a historical high, and the overall adjustment pressure in the commodity market in recent days triggered technical selling in the gold futures and spot markets. In the short term, long stop-loss orders accelerated their exit, further amplifying the price drop.
At the same time, COMEX gold futures inventories have recently shown signs of recovery, and the short-term premium caused by supply chain tensions has gradually diminished. Changes in the market supply and demand structure have reduced investors’ expectations of the “scarcity” of gold, and also put downward pressure on prices.
Huatai Securities pointed out that in the short term, multiple factors drive gold to appreciate strongly and may face shocks,
but the turning point of the appreciation trend has not yet arrived. In the medium and long term, structural factors support the relative performance of gold assets, and as concerns about US fiscal and trade risks intensify, gold is expected to maintain relative strength for a considerable period of time to come.
