Source: Golden Ten Data
International gold prices have driven domestic gold jewelry brands to break through the previous high in pure gold jewelry prices! Analysts believe this wave of gains is not over yet...
As spot gold successfully reached 2,080 US dollars/ounce during the US market last Friday, the price of pure gold jewelry from domestic gold and jewelry brands also reached a record high.
According to reports, gold jewellery brands such as Lao Fengxiang, Laomiao Gold, Chow Tai Fu, Lukfook Jewellery, Chao Hongji, and Zhou Shengsheng all topped 636 yuan/gram today, exceeding the peak of 630 yuan/gram previously reached on December 4, 2023.
The data comes from the Gold Price Search Network
Spot gold continued to hover above a two-month high of 2,080 US dollars/ounce on Monday, as US economic data weakened last week, once again solidifying market expectations for the Fed to cut interest rates in June. Marex analyst Edward Meir analyzed that the reason for the sudden sharp rise in gold prices during the US market last Friday was due to a series of macro data released by the US, which made the market think that the Fed might cut interest rates earlier than expected.
He said, “The price of gold rose by about 50 US dollars last week. According to the Federal Reserve's preferred inflation index, the increase in the past two trading days was absolutely all due to weak data on US manufacturing and construction spending, as well as a background of easing inflationary pressure.” Meir said that the rally may also be due to bears making up, as such a large increase in a short period of time indicates “some bears may have been caught off guard”.
The current intraday all-time high of $2,135 for spot gold was set during a brief rise in early December, but it only lasted a few minutes at the time, then there was a sharp reversal. Since then, the price of gold has not exceeded 2,090 US dollars/ounce.
The sharp rise in gold prices has spurred a boom in gold purchases among domestic consumers. According to data from the China Gold Association, China's gold consumption in 2023 was 1089.69 tons, an increase of 8.78% over the previous year. Among them, gold jewelry consumption was 706.48 tons, up 7.97% year on year; gold bars and coins were consumed 299.60 tons, up 15.70% year on year; industrial and other gold consumption was 83.61 tons, down 5.50% year on year. In the past, people who bought gold were all “aunts,” but for example, young people are also frantically buying gold and saving gold beans.
Central banks are also big buyers of gold. The World Gold Council said that total demand for gold reached a new high last year and is expected to continue to rise in 2024. Among them, the central bank's gold purchases maintained an astonishing growth rate. Last year's net annual purchases were 1,037 tons, which is only 45 tons lower than the record set in 2022. The central bank's purchases are expected to exceed 500 tons this year.
Earlier, UBS predicted that gold and silver prices are expected to rise further in 2024 due to the fact that the Federal Reserve will begin to cut interest rates, as well as large macroeconomic uncertainties and geopolitical risks. The bank's precious metals strategist Joni Teves (Joni Teves) said that the price of gold is expected to hit 2,200 US dollars/ounce by the end of 2024.
TD Securities strategists also said that spot gold is likely to be well above the $2,300 level for some time next quarter. The bank said that lower policy interest rates will drastically reduce actual interest rates, spreads and opportunity costs, thereby attracting speculators and ETF investors to re-enter the market. “This will play a role in combination with the physical market and relative positions that are biased towards the short end, and it is expected that the price of gold will break through $2,300 later this year.”