"Invoices have already been issued!" Branded gold stores are employing various strategies to seize the "520" market. Can gold sales see an uptick during the period of declining gold prices?

"We've already made sales this morning. After all, it's a holiday!" a staff member from a gold store in Guangzhou told a reporter from Cailian Press. As "520" (homophonic for "I love you") approached, multiple gold brands, including China Gold and Chow Sang Sang (00116.HK), launched corresponding promotional activities, such as instant discounts of 100 yuan for purchases of gold worth 520 yuan or more, a 50 yuan discount per gram, exchanging old gold for new pieces at no cost, and offering a 20% discount on designated gold jewelry with fixed prices.

Recently, gold prices have shown a fluctuating trend. Market data indicates that in just over a month, international gold prices have fallen nearly 10% from the historical high of $3,500 per ounce in late April. On May 15, spot gold prices briefly dipped to $3,120 per ounce, but have since rebounded in the past two days, reaching $3,225 per ounce as of press time.

Affected by international gold prices and combined with holiday promotions, the quoted prices for branded gold jewelry have generally fallen below the 1,000 yuan per gram threshold. A visit by a Cailian Press reporter found that today, the listing prices for pure gold jewelry from most gold brands are around 982 yuan per gram, a significant decrease from the 1,061 yuan per gram on April 22.

At the "520" period, "romantic demand" has boosted gold consumption. At a gold store in Guangzhou, Mr. Fu purchased a gold necklace alone, stating, "It's a gift for my loved one on the holiday." Ms. Zhang spent over 4,000 yuan on gold jewelry for herself, including a Pixiu bracelet. A staff member at the store told a Cailian Press reporter, "The discount activities for '520' started a few days ago, and the number of people buying gold jewelry has increased significantly. 'We've already made sales this morning. It's indeed selling better than usual.'"

Due to the continuous rise in gold prices since the beginning of this year, gold jewelry companies have generally faced pressure on their performance.

A senior executive from Chow Tai Seng (002867.SZ) stated at a recent earnings briefing that in Q1 2025, amid increasing uncertainties in the external economic environment and a rapid increase in gold prices, market sentiment has become cautious. Franchisees have shown a lower willingness to make short-term purchases and replenish inventory, putting pressure on the company's franchising business. From this perspective, the decline in Q1 performance was somewhat expected by the company. However, we have also observed some positive signs, such as notable growth in gross profit and profit for the company's self-operated businesses (offline + e-commerce), as well as a significant increase in the overall gross profit margin.

Lao Feng Xiang (600612.SH) mentioned that in Q1 this year, due to the rapid increase in gold prices in the short term, the sales volume in kilograms at the company's Chinese New Year ordering conference decreased YoY, which in turn affected the company's revenue in Q1.

Recently, despite the significant decline in gold prices and the positive impact brought by "520" to the industry, many interviewees still believe that the gold sales market is unlikely to recover in the short term.

A partner from a Shanghai Gold Exchange member company in Shuibei told a Cailian Press reporter that despite the recent correction in gold prices, there has been no significant increase in downstream shipments. "The current gold price is still at a high level. "No new products have been launched in the market, mainly because the current 5.2-gram products already cost nearly 5,000 yuan," said Song Yunming, Chief Analyst at Asamin International Economic Consulting, to a Cailian Press reporter. {{

}} Affected by multiple factors such as tariffs and the Russia-Ukraine relationship, spot gold faced greater downward pressure than upward support in Q2 and early Q3. The phased fluctuation downward indeed created opportunities for adjustment cycles, but the price level around $3,200 per ounce was not worth considering. {{

}} Under such circumstances, gold jewelry producers began to adopt strategies such as integrating online and offline sales and promoting lightweight gold jewelry to boost sales. {{

}} Wu Changfeng, Director and Deputy General Manager of Mankar Dragon, stated that as Generation Z becomes the main consumer force, online and offline channels have entered a phase of deep integration. "We observe that consumers rely on online platforms for product browsing, price comparisons, and initial screenings, while also valuing the in-person experience and product customization at physical stores. Therefore, we have achieved omnichannel synergy through the model of 'online precise lead generation + offline immersive experience': our online store leverages digital tools such as videos and live-streaming sales to enhance conversion rates, while our physical stores strengthen immersive shopping scenarios and VIP services, ultimately connecting the consumer data loop through a membership system. This omnichannel retail strategy not only meets the hybrid needs of the new generation of consumers to 'order anytime, anywhere, and experience in-store as needed' but also brings us an increase in cross-channel repurchase rates." Chow Tai Seng revealed that from 2017 to 2024, the average growth rate of e-commerce sales revenue reached 37.32%. {{

}} Previously, a representative from a publicly listed firm told a Cailian Press reporter, "Consumers tend to visit physical stores for expensive items, while lightweight or lower-value items may be more conveniently purchased online. Young people value the convenience of channels and are accustomed to this consumption scenario." {{

}} Cailian Press reporters noted that on e-commerce platforms, gold jewelry sold by gold brands includes small rings, bracelets, earrings, necklaces, etc., with most prices below 3,000 yuan. {{

}} When asked about the subsequent trend of gold prices, Song Yunming told a Cailian Press reporter that prices may continue to decline in the short term. "On the one hand, gold prices have risen by more than 30% this year, with irrational speculative sentiment prevailing in the market in the second half of April, and many buyers entering at high prices. This corrective fluctuation guides market sentiment back to rationality and even generates risk aversion. On the other hand, bullish and bearish factors are intertwined in the fundamentals, with clear downward pressure around $3,430 per ounce. The risk of short-term overall fluctuation downward still exists. Within a 90-day window, it cannot be ruled out that spot gold may fall below $3,000 per ounce, with key support levels to watch in the range of $2,850-2,930 per ounce."