Photo/Liu Guomei (NBD)

Since the beginning of this year, international gold prices have continued to rise, and the price of gold jewelry in China has reached nearly 600 yuan per gram, showing a 25% increase compared to the end of last year. 

However, the soaring gold prices have not dampened the enthusiasm of Chinese consumers for purchasing gold.

According to the latest report on trends of global gold demand released by the World Gold Council, although global gold jewelry consumption was relatively flat in the first quarter of 2023, being 478 tons, the total amount of gold jewelry consumed in China in the period was 198 tons, representing an increase of 11% year-on-year and 56% month-on-month. 

The report also shows that investment demand for gold bars and coins in China has increased significantly. In the first quarter, sales of gold bars and coins totaled 66 tons, up 34% year-on-year and 7% month-on-month, marking the strongest demand for the first quarter since 2019.

Thanks to the rise in gold prices, several listed companies have seen some improvement in their performance in the first quarter. Among them, Lao Feng Xiang (600612.SH) achieved revenue of 24.56 billion yuan in the first quarter, a year-on-year increase of 33.17%, with a net profit of 716 million yuan, a year-on-year increase of 76.1%; Beijing Caishikou Department Store (605599.SH) achieved revenue of 5.052 billion yuan in the first quarter, a year-on-year increase of 45.62%, with a net profit of 235 million yuan, a year-on-year increase of 30.57%. Chow Tai Seng Jewellery (002867.SZ) achieved operating income of 4.122 billion yuan, a year-on-year increase of 49.65%, with a net profit of 365 million yuan, a year-on-year increase of 26.06%.

According to some industry insiders, besides middle-aged women, younger consumers in China are increasingly fond of gold jewelries.

"Young people are both consumers and investors. They not only value the self expression of jewelry but also the gold's attribute of hedging," said Wang Guoxin, deputy general manager of Mokingran Jewelry Group.

As for the future trend of gold prices, Tan Yaling, Dean of the China Foreign Exchange Investment Research Institute, said that the international gold prices is expected to reach $2,500 this year. The driving force behind the rise in gold prices lies in the depreciation of the US dollar and the Federal Reserve's interest rate hike.