Summary of Key Points
Recently, the spot gold price has returned above $4,200 per ounce after more than a month, even breaking through the $4,300 mark, causing the prices of pure gold jewelry from domestic brands such as Chow Tai Fook and Lao Feng Xiang to increase by over 50 yuan per gram. However, on weekdays, there are very few customers in gold stores, and although regular customers inquire about prices, most of them remain cautious. In the first half of the year, China's total gold consumption increased slightly by 1.23%, but the structure shows a clear divergence: sales of gold jewelry decreased by 33.88%, while sales of gold bars and coins rose by 28.42%. The Gold Association attributes this to fluctuations in gold prices and new tax policies, and warns that current gold prices are still high, posing significant risks. Retail businesses believe that the impact of price volatility on their operations is complex, and in the second half of the year, the industry will need to rely on products and efficiency rather than just the heat of the gold market.
Detailed Analysis
1. Why Do Customers Only Look but Not Buy Despite Rising Gold Prices?
On August 6th, spot gold prices suddenly broke through $4,300 per ounce, leading to a sharp increase in the prices of pure gold jewelry in domestic stores: Chow Tai Fook’s price rose by 57 yuan to 1,297 yuan per gram, Lao Feng Xiang’s by 56 yuan to 1,293 yuan per gram, and Zhou Sheng Sheng’s by 58 yuan to 1,295 yuan per gram. However, reporters observed that there were very few customers on weekdays, and sales staff mentioned that while regular customers would inquire via WeChat, they often did not make a purchase.
The reasons are twofold: first, the prices are too high—nearly 1,300 yuan per gram means a 10-gram bracelet would cost 13,000 yuan, which consumers find too expensive to afford; second, the price fluctuations are too rapid. Consumers are afraid that if they buy now, the price might drop in a few days, so they prefer to wait until prices stabilize or decline before making a purchase.
2. Uneven Gold Consumption in the First Half of the Year: Jewelry Sales Slump, Gold Bars and Coins Gain Popularity
Data from the China Gold Association shows that total gold consumption in the first half of 2026 was 511.4 tons, an increase of only 1.23%. However, there were significant differences within this category:
- Gold Jewelry: Sales dropped by 33.88% year-on-year—high prices make jewelry less attractive to consumers, who prefer to spend their money on more practical items.
- Gold Bars and Coins: Sales increased by 28.42% year-on-year—people are using gold bars as a form of savings, especially during price corrections, as they see them as a way to preserve value and mitigate risk.
- Industrial Gold: Sales decreased by 2.9%—high gold prices have increased the cost for businesses, leading to reduced usage.
The association attributes this divergence in consumption patterns to both fluctuations in gold prices and new tax policies.
3. Gold Association’s Warning: High Prices Remain a Risk
The association emphasizes two key points:
- Current Prices Are Still High: Despite a slight decline in the first half of the year, spot gold prices are still above $4,200 per ounce, which is much higher than in previous years.
- Increased Short-Term Volatility: Future price movements are likely to be more volatile. Whether buying jewelry or investing in gold bars, consumers and businesses need to be cautious about buying at high points, as prices could fall later on.
4. Are Gold Price Fluctuations Good or Bad for Gold Stores?
Zhou Sheng Sheng suggests that it’s not straightforward to say whether rising or falling prices are good. Three factors are crucial:
- Degree and Speed of Volatility: If prices decline gradually, consumers may see the barrier to purchase as lower and be more willing to buy; however, if prices fluctuate significantly within a short period (e.g., rising 50 yuan today and then falling 30 yuan tomorrow), consumers will be hesitant.
- Business Response Capacity: Gold stores need to quickly adjust their inventory (for example, increasing the value of inventory when prices rise but reducing costs when they fall), pricing strategies (to avoid being too expensive compared to competitors), and sales tactics (e.g., offering more affordable smaller sizes of jewelry).
- Profit Margin Impact: Rising prices increase purchase costs for stores, which can reduce profits if prices are not increased accordingly; falling prices lower purchase costs, but consumers may wait for even lower prices, affecting sales.
5. Trends in the Gold Industry in the Second Half of the Year: High Attention, but Dependence on Real Competitiveness
Zhou Sheng Sheng predicts that the second half of the year will see high attention to the gold industry, with continued volatility and significant differentiation among businesses:
- High Attention: Gold remains a topic of interest, and price fluctuations will continue to attract media and consumer discussion.
- High Volatility: International events and the dollar’s performance will influence gold prices, leading to further price changes.
- Strong Differentiation: Only some gold stores will survive; the industry cannot rely on short-term trends like widespread buying when prices rise. Instead, they need to focus on innovation (e.g., designing more distinctive jewelry to attract younger consumers), improving operational efficiency (e.g., reducing rental costs), and building brand trust (to make customers feel confident in their products).
In summary, gold price fluctuations are neither entirely positive nor negative. For consumers, it’s a matter of deciding whether to buy; for businesses, it’s about how to adapt to these changes. To succeed in the gold industry in the second half of the year, companies will need to rely on their actual capabilities rather than simply betting on price movements.