May 1st, buying gold is the main force, but also need to consider the middle-aged and elderly.

The popularity of gold jewelry consumption remains high, while jade sales are sluggish.

The May Day holiday is usually the peak period for shopping and tourism in China, and it is also the focus of attention for businesses and consumers. During the May Day holiday, reporters from Time Weekly visited stores such as Caibai, Chow Tai Fook, Chow Sang Sang, Lao Feng Xiang, and China Gold in Beijing, and found that consumers who came to inquire about and purchase gold jewelry were continuous.

Consumers are most enthusiastic about gold jewelry, followed by investment in gold bars, while the sales of silver and platinum jewelry are significantly lower than gold. Sales of jade, coral, and amber jewelry are the most sluggish. With the support of business marketing activities, the sales of other jewelry products, apart from gold, are still not optimistic.

Under the influence of factors such as central banks of various countries increasing their holdings of gold, the Federal Reserve's slowing down of balance sheet reduction, and market risk aversion sentiment, several industry experts interviewed by Time Weekly expressed optimism about the long-term trend of gold prices, but attention should be paid to the speculative sentiment in the short-term gold market.

Crowds gather at the gold jewelry counter

Taking the Caibai flagship store in Xicheng, Beijing as an example, the sales area for gold jewelry on the first floor of the building is constantly bustling with consumers who come to purchase gold jewelry. The offline stores of Chow Tai Fook, Chow Sang Sang, and Lao Feng Xiang in Xidan Joy City and Beijing Huiju Shopping Center have a similar situation, but the overall foot traffic is generally lower compared to the Caibai flagship store.

The gold prices displayed in the shopping mall show that on May 1st, the prices of Caibai Jewelry's pure gold and pure gold 999‰ (i.e. original thousand gold) without labor costs were 686 yuan/gram and 689 yuan/gram respectively; Lao Feng Xiang's pure gold price was 708 yuan/gram; Zhou Dasheng's gold jewelry price was 703 yuan/gram; and Chow Tai Fook's gold jewelry price was 702 yuan/gram. According to the salesperson, the number of customers and transactions in the first two days of the May Day holiday was significantly lower than during the Spring Festival holiday. Despite the rise in gold prices, smaller gold jewelry is more popular. The main consumers of gold jewelry are still middle-aged and elderly people. Cultural traditions, psychology, and social factors are the main reasons for purchasing gold jewelry. Some consumers buy gold jewelry for marriage or festival celebrations, some buy it as gifts for relatives and friends, and some buy it for personal use. The practicality of purchasing gold is generally greater than its investment value. At the investment gold bar counter on the fourth floor of Caibai's flagship store, the number of consumers inquiring about investment-type gold was far less than those inquiring about gold jewelry. The situation is similar at the panda gold coin sales counter on the first floor of Caibai, and at the China Gold counter in Xidan Joy City. The number of consumers inquiring about gold jewelry is more than those inquiring about investment-type gold. The salesperson mentioned that customers who buy gold jewelry generally have a shorter transaction cycle, while customers at the investment gold bar counter are more concerned about value appreciation and preservation, and their decision-making process is more diverse and longer. To promote jewelry sales during the May Day holiday, Caibai Jewelry launched activities such as "buy gold and get silver," coupon returns for reaching a certain amount, and gifts for jade and diamond jewelry. Other businesses also launched activities for Mother's Day and "520." However, during the visits, it was observed that compared to gold jewelry, there were very few consumers in front of the counters for silver, platinum, jade, coral, and amber jewelry. Although there were occasional onlookers, the number of actual transactions was very low. Nonetheless, the flow of people at the silver jewelry counter was slightly better than at the platinum jewelry counter, and the flow at the platinum counter was significantly better than at the jade, coral, and amber counters.

According to the product label, the retail price of silver at Caibai Foot is 18 yuan/gram, and the base silver price is 6.60 yuan/gram. Some mall staff have indicated that the silver price has also seen a significant increase recently, with the base silver price reaching 7 yuan per gram at one point, and some adjustments were made before the recent holiday.

In addition, the price of platinum at Caibai Qianzu is 368 yuan/gram. Data from the Shanghai Gold Exchange shows that in the past few years, domestic platinum prices have been sluggish. From the second half of 2020 to the present, the price of platinum 99.95 on the Shanghai Gold Exchange has fluctuated between 190 yuan/gram and 278 yuan/gram. After 2021, its price center has further shifted downward.

A salesperson at a platinum sales counter told the Time Weekly reporter, "Previously, when the price of gold rose, there would also be a certain substitution demand for platinum, but this year, the substitution effect of platinum during the rise in gold prices is not particularly obvious. In the minds of many customers, gold always occupies an important position, and it is difficult for other jewelry to completely replace it."

A channel person in the jewelry industry introduced to the Time Weekly reporter, "Jade and other jewelry are non-standard products and are not particularly easy to evaluate. Non-professionals are not very familiar with jade and tend to be cautious, so true connoisseurs will not go to the mall to make purchases. Therefore, the transactions of jade in the mall are usually relatively few."

Long-term positive trend in gold prices

In mid-April this year, the international gold price rose to a high of $2431 per ounce. Due to factors such as the international gold price and the exchange rate of the RMB, the domestic gold price also experienced a sharp rise. Regarding the future trend of gold prices, the Time Weekly reporter found through interviews that the industry generally holds an optimistic view of the long-term gold price.

An open-end fund professional engaged in gold investment analyzed to the Time Weekly reporter, "Purchasing jade and coral jewelry requires a very substantial knowledge reserve, while the threshold for purchasing precious metal jewelry is much lower. Because the performance of platinum prices is relatively average, and the storage environment for silver is slightly higher than that for gold, considering cultural factors and investment prospects, investing in gold bars and purchasing gold jewelry is the mainstream choice in China. Both domestic and foreign factors are favorable, and the long-term performance of gold prices in the future is worth looking forward to."

Baocheng Futures analyst Long Aoming stated, "The sharp short-term fluctuations in gold prices are likely to weaken the attractiveness of gold as a safe-haven asset and increase its value as a speculative tool. From a longer-term perspective, the global entry into an interest rate reduction cycle and the purchases of gold by central banks around the world will support the long-term rise in gold prices. After the market adjustment ends, investors can look for the right time to buy."

The Federal Reserve's interest rate meeting held on May 2nd Beijing time also provided a shot in the arm for gold. The meeting showed that the Federal Reserve will maintain interest rates in May and slow down the reduction of its balance sheet in June. Federal Reserve Chairman Powell stated at a press conference after the meeting that the committee has made insufficient progress in achieving the 2% inflation target in recent months, but it is unlikely to raise interest rates.

A macro analyst at a securities firm believes that the short-term possibility of an interest rate cut is low, and the Federal Reserve's slowing down of balance sheet reduction is positive for gold. However, he cautioned, "There has been some exchange rate volatility during the May Day holiday, which will have some impact on domestic gold prices. In addition, the short-term sentiment for gold speculation is strong, and there will be relatively large fluctuations in the near future."