Demand for gold jewellery in China is expected to remain strong throughout 2021 owing to more favourable market fundamentals as well as lower gold prices that support jewellery sales, revealed the World Gold Council (WGC).
According to Roland Wang, managing director of WGC China, recent developments point to a solid recovery in demand for gold jewellery, bars and coins in the country, and the momentum is expected to persist.
“This could be chiefly due to China’s strategic positioning of domestic consumption stimulation, the gold price adjusting to a relatively favourable and stable level for consumers as well as the Chinese economy remaining strong,” noted Wang.
These factors are likely to prevail throughout the year given current conditions, but Covid-related challenges still pose a threat.
“We have reasons to believe that growth in China’s gold jewellery demand will last this year. However, the recovery could meet some headwinds potentially from unforeseen economic hiccups, the possibility of more outbreaks of the pandemic and lastly a higher gold price,” he added.
WGC data showed gold prices as of April 7, 2021 reached US$1,738.5 per ounce, down from US$1,863.89 recorded in January 29, 2021. Gold prices peaked in the third quarter of 2020 – at the height of the coronavirus outbreak – hitting US$2,067.15 in August 6. Prices fell to US$1,638.95 in March 20, 2021.
Wang noted that lower gold prices generally favour jewellery retailers as evidenced by strong demand for gold jewellery during the Chinese New Year holiday this year compared to 2020 and 2019. As such, WGC expects gold jewellery sales in the first quarter of 2021 to have grown significantly year on year, remarked Wang.
A Chow Tai Fook Jewellery Group spokesperson meanwhile commented, “More customers are buying gold products recently as gold prices fall to lower levels. We also believe that the rollout of vaccines will favour a gradual recovery in the jewellery retail sector as a whole.”