Gold prices have soared to a new record this week, sparking a rush of activity in Hong Kong’s jewellery shops as residents seek to sell or purchase the precious metal.
This year, gold has jumped over 10% globally, reaching an all-time high of US$2,942.70 per ounce (28.3 grams) on Tuesday. This comes after a 26% increase last year, marking the biggest annual gain in 14 years.
In Hong Kong, gold prices have followed the global trend, rising to HK$27,040 per tael (US$3,466 for 37.9 grams) on Tuesday—35% higher than the start of last year.
Jewellery stores are seeing a significant surge in customers. Fook Tai Jewellery Group, with seven locations across Hong Kong, is one of many retailers experiencing this boom. While most customers are looking to sell, some are also eager to buy. Many gold shops in the city offer customers the option to exchange their gold jewellery for cash or other products.
“Since May of last year, many customers have come in to cash in their gold jewellery,” said Anita Lee, product manager at Fook Tai. “At the same time, there are mainland visitors, especially those planning weddings, who are rushing to buy gold jewellery. They worry the price will continue to rise.”
Some buyers are also turning to gold bars and coins, hoping to benefit from further price increases, Lee added.
When gold prices climb, customers often sell their existing jewellery, said Robert Lee Wai-wang, vice-president of the Hong Kong Gold Exchange. “Those who bought gold jewellery a few years ago are now seeing significant profits.”
For example, those who bought gold in October 2023 at US$1,809.50 per ounce could now earn a 63% return on their investment, excluding any fees.
Lee also believes that gold prices may continue to rise, attracting more buyers. “Some investors who missed last year’s gold rally may still feel it’s not too late to buy,” he said.
The recent surge in prices is largely driven by central banks, including China’s, which have been purchasing gold as part of efforts to diversify their reserves and hedge against inflation. According to the World Gold Council, central banks bought 1,045 tonnes of gold last year, nearly matching the previous year’s record of 1,082 tonnes.
Looking ahead, Anderson Cheung, head of global commodities at Hong Kong-based Best Profit Capital, predicts gold could reach US$3,000 per ounce soon. He forecasts a potential further increase of 20 to 25%, possibly pushing prices to around US$3,400.
For local resident Katie Chan, who is getting married later this year, the timing of the record high prices is a challenge. A pair of traditional gold dragon and phoenix bracelets—an essential part of a Chinese wedding ceremony—now costs around HK$32,300. That’s more than 60% higher than it was at the start of 2024.
“Gold jewellery is a must for Chinese weddings, but it’s painful to see the price rise so high just now,” Chan said. “I don’t want to pay that much for something I’ll only wear on my wedding day. I’m considering borrowing jewellery from relatives or selling some of my own pieces to cover the cost.”
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